Mortgage News April 7, 2023
As per the National Association of Realtors (NAR), baby boomers have now become the biggest cohort of homebuyers, surpassing millennials. In 2022, boomers represented 39% of all homebuyers, up from 29% in the previous year, while millennials’ share dropped from 43% in 2021 to 28% in 2022. The rise of the boomer generation ended years of millennials being the largest group of buyers in the market. Younger boomers (ages 58 to 67) comprised 23% of buyers, while older boomers (68 to 76) made up 16% of buyers.
The increase in the number of baby boomers buying homes is attributed to their years of built-up equity, boosted by the run-up in home values during the peak market years of the COVID-19 pandemic. Jessica Lautz, NAR’s deputy chief economist and vice president of research, said that baby boomers have the upper hand in the home-buying market. She further stated that most of these buyers are repeat purchasers who have home equity to fund their dream property, whether it’s a retirement haven or a residence in close proximity to their loved ones and friends.
In 2022, the boomer generation saw an increase in their share of home sellers, rising from 42% in 2021 to 52%. Meanwhile, the percentage of first-time home buyers dropped to 26% in 2022, the lowest recorded by the NAR since tracking the metric. In the preceding year, 70% of younger millennials (aged 24 to 32) and 46% of older millennials (aged 33 to 42) were first-time homebuyers.
In 2022, Generation X (aged 43 to 57) accounted for 24% of homebuyers, a decrease from 26% in 2021. Among all generations, they had the highest median household income of $114,300, followed by older millennials with $102,900. Conversely, Generation Z (aged 18 to 23) accounted for 4% of buyers in 2022, which is an increase from 2% in 2021, and had the lowest median household income of $50,400.
Regardless of age, most homebuyers financed their purchases with a mortgage. During 2022, 78% of homebuyers utilized financing, and the proportion declined as the buyer’s age increased. Most younger buyers reported using savings for their downpayment, while older buyers used the funds from the sale of a previous home.
The NAR report provides valuable insights into the changing dynamics of the housing market and highlights the key factors influencing home buying and selling trends among different generations.
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