A person’s age can affect a lot of things about their life, including what type of house they are in the market to buy. Millennials, Gen Xers and Baby Boomers are the three largest age groups dominating today’s mortgage industry, and here are some trends that impact their homebuying experience.
Millennials (Born between 1981 and 2000)
About 35 percent of today’s homebuyers belong to the millennial generation, making them the largest demographic of buyers currently. This generation tends to value experience over everything, resulting in a preference to live in urban environments like townhouses and open floor plan apartments with easy access to public transit, restaurants, and entertainment. So, it’s not just about the home itself – it’s about the surrounding environment and personality of the area. While a number of millennials are eager to become homeowners, they do face concerns that can make ownership difficult. A third of millennials have scores below 620 and they face the burden of paying off student loans from college. Buying a home, however, is still possible for millennials with mortgage options that offer low down payments and by starting small in their home ownership journey.
Generation X (Born between 1965 and 1980)
Generation X isn’t the largest group of home buyers, but they do have the largest incomes as they tend to be in their peak earning years. While younger buyers want to live in urban areas, 58 percent of Gen X buyers want to live in the suburbs. Not just any suburb will do, though, since they also want to live in places that make it convenient for them to make their morning work commute and drive their kids to school. Speaking of school, this is a big deal for Generation X as they are very concerned about being in a high-quality school district. This age group also prefers to invest in a home that is easily adaptable to the various stages of life whether they have children growing up in their home or they need to provide room and care to any elderly family members.
Baby Boomers (Born between 1946 and 1964)
Many baby boomers have reached the point where they want to start downsizing. Many don’t feel the need to have a large home as they’re entering retirement, so a lower cost of living is a plus. While many boomers are willing to downsize, they want to hold on to some of the advantages they enjoyed while living in large houses such as large kitchens, en-suite guest rooms, and open floor plans. The key for boomers is finding a home that matches their physical abilities like single story homes with wide doors and hallways. They would also like to have nearby amenities such as fitness centers, pools, clubhouses and lawn care.
Statistics show that a buyer’s age group can have a significant effect on what they might want when they enter the mortgage market. You can’t always predict what a homebuyer will want, but understanding demographics is a good start!