Millennials Account for Largest Share of Homebuyers at 37%
Washington, DC, March 18, 2021-The popularity of multigenerational homes increased over the last year, as a rising number of homebuyers purchased larger residences compared to prior years, including millennials who continue to make up the largest share of homebuyers at 37%.
This finding is revealed in the National Association of Realtors' most recent study on the characteristics of homebuyers, the 2021 Home Buyers and Sellers Generational Trends report.
Millennials have been the largest share of buyers since NAR's 2014 report. The most recent data shows that 82% of younger millennials and 48% of older millennials were first-time homebuyers, more than other age groups.
According to the study, during the last year, 18% of homebuyers between the ages of 41 to 65 purchased a multigenerational home-a home that will house adult siblings, adult children, parents or grandparents.
"There are a variety of reasons why large families and extended families are opting to live together, one of which is that it's a great way to save money," said Jessica Lautz, NAR's vice president of demographics and behavioral insights. "Also, in light of the pandemic, many grandparents and older relatives found that being under a single roof – quarantining with family rather than away – worked out better for them."
Homebuyers ages 75 to 95 were the second most likely to purchase a multigenerational home, and were most likely to purchase senior-related housing, at 27%.
With inventory levels being alarmingly low in recent years and even dropping to record-low levels last year, a number of would-be homebuyers consequently had difficulties finding adequate housing options. Nearly six in ten homebuyers between the ages of 22 to 40 said just finding the right property was the most challenging step in the buying process. More than half of all homebuyers (53%) cited finding the right property as the most difficult step.
Twenty-eight percent of homebuyers between the ages of 22 to 30-those who make up younger millennial buyers-lived with parents, relatives or friends before purchasing. This is higher than any other generation. Living with family first tends to allow flexibility toward saving for a downpayment and finding a home, given the low housing inventory.
Twenty percent of homebuyers between the ages of 22 to 30 were unmarried, a decline from 21% from a year ago. Additionally, 22% of homebuyers between the ages of 66 and 74 were single women.
"Single women remain a large buying force," said Lautz. "A number of divorced women and those who were recently widowed purchased a home without the help of a spouse or roommate."
In terms of buyer characteristics, 19% of older boomers-buyers between the ages of 66 and 74-and 18% of Generation Xers-buyers ages 41 to 55-were most likely to purchase a new home to prevent having to do renovations or avoid plumbing or electricity problems, and these buyers prioritized having the ability to choose and customize design features.
Seventeen percent of buyers who are part of the silent generation-those between the ages of 75 to 95-purchased newly-built homes. These buyers were least likely to compromise in their home search and least likely to purchase a detached single-family home.