As Bob Dylan once wrote in his popular rock song, “The times, they are a-changing.”
There couldn’t be a more apropos anthem when it comes to the demographics of the housing market landscape.
According to the National Association of REALTORS® (NAR) 2024 Home Buyers and Sellers Generational Trends report, Millennials have finally surpassed baby boomers and become the largest group of homebuyers in the U.S. This marks a significant shift in the housing market.
“The generational tug-of-war between millennials and baby boomers continued this year, with millennials rebounding to capture the largest share of home buyers,” said Dr. Jessica Lautz, NAR deputy chief economist and vice president of research. “This notable rise is attributed to both younger millennials stepping into homeownership for the first time and older millennials transitioning to larger homes that suit their evolving needs.”
The report identifies that 38% of the homebuying market are now millennials, who make up a group between the ages of 25 and 43. That marks a 10% increase over 2023. Meanwhile, Baby Boomers (ages 59-77) came in at 31% of the market, down nine percent from a year ago.
Part of the change was the result of a modest increase in first-time homebuyers, up six percent across the board from last year. But putting a finer point on it, younger millennials (25-33) saw a five percent increase in first-time homebuyers while older Millennials made up 44% of the first-time homebuyer picture.
Younger Millennials (86%) consider the purchase of a home as a good financial investment. That’s higher than the average across all generations (82%), which could indicate that demand will remain high well into the future.
The question is, how long will Millennials hold this position at the top?
A New Look to the Market
Don’t look now but Generation Z (18-24) has emerged as a player in the homebuying game, accounting for three percent of the market. And while that may seem like a small amount, it is bucking trends from their predecessors.
Almost one-third of all Gen Z homebuyers re single women (31%), a number that exceeds all previous generations at the same ages.
“Gen Z buyers are entering the housing market, and their demographics are emerging distinctly from other age groups,” Lautz said. “More than half are single buyers, outpacing all age groups of single men and single women, and they are also most likely to identify as LGBTQ+.”
This indicates that the future of the market will be more diverse and include more independent homeowners than ever before.
Same Old Sellers
While Millennials and Gen Z are making their impact on the buying side of the market, Baby Boomers are still at the top of the chain when it comes to sellers.
According to the report, 45% of all homes sold in 2023 were done by Boomers. The average age across all generations of tenure within a home was 10 years before selling, but the Millennials did have an impact here as well.
While Gen X, Baby Boomers, and the Silent Generation (78-98) typically stayed in their homes for 15 years, Millennials sold their homes after an average of six years.
“Baby boomers continue to dominate the home-selling market as they make pivotal decisions regarding their retirement living situations, whether it’s right-sizing or moving closer to loved ones,” Lautz said. “Benefiting from longer periods of homeownership compared to other generations, boomers approach these transactions with substantial equity, enabling strategic housing trades.”
Faith in Real Estate Agents Remains High
Across all generations, 90% of buyers indicated they would either definitely (75%) or probably (15%) enlist their real estate agent’s services again or recommend them to others. Similarly, among sellers, 87% expressed they were likely to reuse or refer their agent.
“The universal value of owning a home transcends every generation, serving as a cornerstone for both personal prosperity and community development,” said NAR President Kevin Sears, broker-partner of Sears Real Estate in Springfield, Massachusetts. “In navigating the complexities of the market, buyers and sellers continue to rely on agents who are Realtors® for their expertise and guidance, underscoring the invaluable service they provide in bringing dreams of homeownership to life.”
