The current real estate market is like no other in history in there is a lack of inventory of homes being listed for sale. According to an article in Keeping Current Matters, "A balanced real estate market's inventory sits around 6 months. Today's current market is at 1.7 months." Home prices are increasing at levels we couldn't even imagine a few years ago. According to the same article, "Last year, home values appreciated an average of 15% across the nation." There has been a backlog of buyers for a couple years now. Who are these buyers and which generations are they coming from?
Millennial Home Buyers
The largest group of home buyers today are the Millennials, also known as Generation Y. These folks were born between 1981 to 1996. The most recent data from the National Association of Realtors®' 2021 Home Buyers and Sellers Generational Trends Report states that almost 50% of older millennials and over 80% of younger-age millennials were first-time homebuyers. Many Millennial homebuyers are purchasing investment properties in order to enhance their income or even as a primary source.
Baby Boomer Home Buyers
The Baby Boomers were born between 1946 to 1964. They are currently purchasing homes in warmer climate areas of the country, such as Florida, Georgia, Texas, North Carolina, South Carolina and Arizona. Baby Boomers are also downsizing. They are coming of retirement age or taking early retirements. Many have been working from home during the Covid-19 pandemic and are often choosing to live where it's warmer year-round.
Generation Z Home Buyers
Older Generation Z (Gen Z) members are just starting to purchase homes. According to the same 2021 National Association of Realtors® report, they currently make up two percent of homebuyers. Gen Z members were born between 1997 to 2012. If you are part of the Gen Z group and are thinking of purchasing a home in the near future, it is important to consult with a real estate professional and a mortgage lender. They will help you strategize on what you need to do to become a homeowner. Strategies such as creating and maintaining good credit, keeping a stable job, saving for a down payment and so on are imperative. Home values are high right now and you'll need to be prepared to pay top price for a home. It's never too early to start preparing to purchase your first home.
The same report revealed that 18% of homebuyers who are between the ages of 41 to 65 purchased multigenerational homes. A multigenerational home is where many family members live together. These family members can include elderly parents, children or adult children, siblings, nieces and nephews, or even grandparents. This style of living has been around for quite some time; however, it became even more popular during the Covid-19 pandemic. Many people want their family members close together so they can take care of each other. They feel it is better to quarantine together than to have family members isolated and have to quarantine alone. It is also less expensive to share the housing bills between the adults in the group. Having one mortgage and one set of utility bills to pay and split between them, is advantageous.