Many Gen Xers are moving up, wanting more space and buying homes at price points they only dreamed about as younger homebuyers.
Who Are Gen Xers?
Whereas Boomers represent “past” housing markets and Millennials and Gen Zers represent future housing markets, Gen Xers represent the current housing market.
They were born between the mid-60’s through about 1980. The Pew Research Center indicates that the Gen X demographic has approximately 65M and makes up some 24% of all homebuyers and 25% of all home sellers.
37% of Gen X households, according to the National Association of REALTORS® (NAR), generate approximately $85,000 – $150,000 per year while 17% earned more than $200,000.
While now in their prime earning years, many Gen Xers “took the brunt” of the housing collapse during the Great Recession. George Ratiu, Realtor.com senior economist, said, “When the bust came, a lot of Gen Xers ended up losing their homes to foreclosure. It took quite a while for them to see their equity go from being underwater to being positive. And many of them took longer to trade up from an entry level home.”
Where Are Gen Xers Moving/Buying?
This 2021 NAR report to which we’ve been referring in all of these demographic reports indicated that Gen X homebuyers are looking for homes where they already live…an average distance of 10 miles from their previous homes. (Just remember that many Gen Xers are tied to their current locations by jobs and their kids’ schools.)
49% of Gen Xers buy homes in the suburbs near their previous homes.
Gen Xer Home Preferences
The word “traditional” pretty much sums up the typical Gen Xer’s perspective: traditional style home, traditional style saving channels such as a 401K, traditional style working patterns such as working their way “up the ladder” and traditional style property acquisition such as beginning with a starter home and moving up to a larger one,, not skipping property rungs.
Likewise, Gen Xers tend to be middle-of-the road home spenders. According to NAR, 44% of Gen Xers are willing to spend $350,000 or less on a home.
Gen Xer amenity preferences mirror their family orientation. First, Gen Xers want a garage, then an updated kitchen, large backyard and quiet location. Gen Xers are willing to put in the sweat equity to get those amenities, unlike Boomers and Millennials.
How Gen Xers Pay for Their Homes
Clearly, Gen Xers have more buying power than younger buyers as they’ve been working longer, saving longer and have generally been more “careful” with their money dur to their lived experiences with the housing crash and Great Recession.
Most Gen Xers intend to put down 11% – 20% down payment but it’s worth pointing out that 16% of them plan to pay for their homes in cash.
Another factor to keep in mind with Gen Xers: many are moving during or following divorces and splitting “community assets.” This translates into buying smaller houses and/or townhomes/condominiums.
Thanks to Inman.
