When it comes to buying homes, age is just a number — at least, according to recently released 2023 Home Buyers and Sellers Generational Trends Report from the National Association of Realtors (NAR), which revealed that baby boomers have surpassed millennials as the largest generation of homebuyers.
Boomers made up 39% of all homebuyers in 2022, up from 29% the year prior. Younger baby boomers (ages 58 to 67) comprised 23% of buyers while older boomers (68 to 76) made up 16% of buyers.
The rise of the boomer generation put an end to years of millennials being the largest group of buyers in the market. The demographic cohort from 24 to 42 years old had held the top spot since 2014. Affordability issues, among other things, pulled the millennial share of the market down from 43% in 2021 to 28% last year.
Baby boomers, meanwhile, were able to take advantage of years of built-up equity, boosted by the run-up in home values during the peak market years of the COVID-19 pandemic, to find ideal housing situations.
“Baby boomers have the upper hand in the homebuying market,” said 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 and making housing trades later in life.”
Boomers also remained the largest generation of home sellers, growing from a 42% share in 2021 to 52% in 2022.
The drop in millennial buyers is innately tied to the stark decrease of first-time homeowners. Only 26% of all buyers in 2022 were first-timers, down from 34% a year earlier for the lowest share since the NAR began tracking the metric. Seventy percent of younger millennials (24 to 32 years old) and 46% of older millennials (33 to 42) were first-time buyers last year.
Generation X (ages 43 to 57) comprised 24% of all homebuyers in 2022, down from 26% in 2021. At $114,300, Gen X had the highest median household income of any generation, followed by older millennials at $102,900.
Generation Z (ages 18 to 23) made up 4% of buyers, up from 2% in 2021. They bought homes while having the lowest median household income at $50,400 and purchased the smallest properties at less than 1,500 square feet on average.
“As the youngest generation of homebuyers and sellers, it’s encouraging to see Gen Z entering the market,” Lautz said. “Their desire for homeownership is strong and many are relying on family support systems to help make their first real estate purchase.”
Sixty-one percent of recent buyers were married couples. Another 17% were single females, 9% were single males and 10% were unmarried couples. The highest share of single female buyers were within Gen Z at 31%. The highest percentage of unmarried couples were younger millennials at 20%.
Regardless of age and similar to previous years, a vast majority of homebuyers finance their purchases with a mortgage. In 2022, 78% of homebuyers used financing, with the share decreasing as the buyer’s age rises. Most younger buyers reported using savings for their downpayments, while older buyers used the funds from the sale of a previous home.