By: Melissa Dittmann Tracey Older adults who have built equity over many years are in the best position to purchase homes in today’s roller coaster market, NAR data shows.
Baby boomers are proving to be the big movers in real estate, comprising the highest share of buyers and sellers nationwide, according to the National Association of REALTORS®’ 2023 Home Buyers and Sellers Generational Trends Report. Older adults may have been more insulated than other generations from the roller coaster housing market over the last year, tapping into record equity to sell their homes at premiums. Baby boomers also have been motivated to downsize and move closer to family.
Baby boomers—people ages 58 to 76—accounted for 53% of sellers and 39% of buyers between July 2021 and June 2022, the most of any generation, NAR’s report shows. “Baby boomers have the upper hand in the homebuying market,” says Jessica Lautz, NAR’s deputy chief economist and vice president of research. “The majority of them are repeat buyers who have housing equity to propel them into their dream home, be it a place to enjoy retirement or a home near friends and family. They are living healthier and longer lives and making housing trades later in life.”
Millennials, once the leading drivers of the housing market, are now playing second fiddle, comprising about 28% of buyers, according to NAR data. Millennials were the largest homebuying force from 2014 to 2022.
First-time home buyers, who don’t have the advantage of leveraging a previous sale for a down payment on a new home, have faced headwinds in the latest housing cycle, like higher mortgage rates. Seventy percent of younger millennials, ages 24 to 32, and 46% of older millennials, ages 33 to 42, were first-time home buyers. These age groups were more likely to fall within this segment of buyers than others, according to the report.
Baby boomers, who are most likely to use equity from a past home to make a new purchase, may be in a better position to move. They’ve tended to be in their current home the longest, which lends itself to being in a better equity position. They’re highly motivated, too. Baby boomers increasingly say they are purchasing a home to live closer to friends and family due to retirement or a desire for a smaller home. Eighteen percent of home buyers ages 68 to 76 say they purchased a multigenerational home, according to the study.
They also tend to be drawn to newer homes. The typical home purchased by a baby boomer was built in 1996, which is a newer property than those purchased by other generations. The national average age of a recently purchased home was 1986, according to NAR. Boomers tend to be drawn to newer housing inventories because they want to avoid renovations or potential problems with household systems, like plumbing or electricity. Baby boomers also are more likely than other generations to say they’re purchasing their “forever home.”
Relying on Real Estate Agents for Help
All generations favored working with real estate agents to help buy or sell. Eighty-six percent of home sellers worked with a real estate agent to sell their home, a consistent percentage across all age groups. Referrals from a friend, neighbor and relative were the most common method for finding an agent, according to the survey.
All generations also pointed to numerous skill sets they look for in an agent. Buyers indicate they want an agent who can educate them about the homebuying process, point out unnoticed features or faults with a property, provide a list of service providers, and negotiate better terms in a sales contract. Sellers say they favor agents who have a strong reputation, are honest and trustworthy, are a friend or family member, and understand the seller’s neighborhood.
Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine, editor of the Styled, Staged & Sold blog, and produces a segment called “Hot or Not?(link is external)” in home design that airs on NAR’s Real Estate Today radio show. Follow Melissa on Instagram and Twitter at @housingmuse.