In 2023, it’s not your parents’ housing market or is it?
Many homebuyers, either those looking to purchase for the first time or repeat buyers, want to do things differently than mom and dad.
After all, this is a more informed generation, one that is adept at technology and seeks out modernized housing – not just the traditional three bedroom with a lawn and a white picket fence.
And while that does make up a sizeable portion of the homebuying population, Millennials aren’t the only demographic looking to purchase homes.
In fact, it’s easy to forget that their parents and grandparents, still might want to find another place to live, even if they are more likely to want to stay put.
Whether it’s downsizing once the kids are grown, or simply upgrading to a more modern home that is ADA compliant, or even moving closer to their children so they can be around the grandbabies, older Americans are still a vibrant part of the housing market.
According to research from the National Association of REALTORS® (NAR), while the average length of time in a home has grown to about 10 years, and that number is projected to rise even further in a post pandemic society, the average age of a repeat buyer is also high – at 59-years-old.
“They very well could be a retirement buyer, or they could be chasing the grandchild,” said Dr. Jessica Lautz, Deputy Chief Economist and Vice President of Research at NAR. “The typical distance that our repeat buyer is moving is actually 90 miles – which is a very long distance away. Typically, we have seen that, (on average, all) people move about 15 miles. Repeat buyers may not know that local neighborhood. They may need to learn or rely on their agent a lot more to really show them the area.
“I can’t tell you about any neighborhood that’s 90 miles from me with any confidence at all, but these repeat buyers probably have quite a bit of equity in their home, so growth may have slowed. They may be less wary about making that move because now is probably a good opportunity because there is less competition in the marketplace because interest rates rose.”
Today’s Older Generation
And while previous generations of older, repeat buyers would have been happier to just stay in one place and not get caught up in the hustle and bustle of younger society, today’s older generation has basically reinvented themselves.
They are quite active on social media. They like to buy things with all the bells and whistles. If they have money to spend, they’re going to spend it.
“There’s a lot of misconceptions and myths about older adults” Lautz said. “You know, ‘They don’t like to use technology,’ and ‘They don’t want green features.’ All of that should really be put out the door, because most of them are very savvy, and they do want all the (accessories), and they can afford it now.”
And if they can’t completely afford it on their own, well, they’ll go halfsies with a friend.
While younger, first-time homebuyers are going in on the purchase with friends in order to build equity and asset wealth without the personal financial burden, older women are also buying homes with roommates – much like on the Golden Girls.
“It’s the Grace and Frankie or the Golden Girls phenomenon that’s happening,” said Lautz, referring to two popular television shows that have featured older women as roommates.” Companionship and affordability is helping there.”
Multi-generational Living is on the Rise
And sometimes, it’s not just finding a roommate, but maybe living with their adult children as well.
NAR data shows that 14% of homebuyers are multi-generational. Most of these homes will include an accessory dwelling unit (ADU) that is either attached or unattached from the primary living space but remains on the property. However, there are many instances where its families living together under one roof.
And while there is certainly a propensity for generational warfare within these specific living situations – whether it’s the frustration of taking in an elderly relative or having an adult child who just won’t leave – this remains a significant segment of the homebuying population.
“Some home builders have essentially started building structures where you have a (modified) ADU where you don’t have a full kitchen, but you do have a little kitchenette, so no one can burn down the house,” Lautz said.
This has also led to a greater share of first-time homebuyers going directly from living with their parents or other family members to buying a home and skipping the rental step altogether, which can be a win/win, even if there are personality conflicts within the home.
As we now think about these older homebuyers, we want to offer some tips about buying a home when you are older and how it could be different from buying a home when you were younger.