Gen X buying to Accommodate Adult kids - Orange County Realtor Jaleesa Peluso

One in six Gen Xers purchased a multi- generational home, overtaking younger boomers as the generation most likely to do so

; with 52 percent of those Gen X buyers indicating that they did so because their adult children have either moved back or never left home.

FROM National Association of Realtors® (NAR): This is according to the NAR® 2019 Home Buyer and Seller Generational Trends study, which evaluates the generational differences1 of recent homebuyers and sellers. The report also found that older millennials who bought a multi-generational home, at 9 percent, were most likely to do so in order to take care of aging parents (33 percent), or to spend more time with those parents (30 percent).

“The high cost of rent and lack of affordable housing inventory is sending adult children back to their parents’ homes either out of necessity or an attempt to save money,” says Lawrence Yun, NAR chief economist. “While these multi-generational homes may not be what a majority of Americans expect out of homeownership, this method allows younger potential buyers the opportunity to gain their financial footing and transition into homeownership. In fact, younger millennials are the most likely to move directly out of their parents’ homes into homeownership, circumventing renting altogether.”

Millennials as a whole accounted for 37 percent of all buyers, making them the most active generation of buyers for the sixth consecutive year. 2019 is the first year the report separated younger and older millennials, accounting for 11 and 26 percent of buyers respectively. This separation was deemed necessary as younger millennials now account for a larger buying share than the silent generation (7 percent). Gen X buyers were the second largest group of buyers (24 percent), followed by younger boomers (18 percent) and older boomers (14 percent).

Dividing millennials into younger and older cohorts highlights the disparities between the two age groups, and paints a picture of older millennials that is much closer to Gen Xers and younger boomers. Older millennials have a median household income of $101,200 and purchase homes with a median price of $274,000, comparable to Gen Xers ($111,100 income, $277,800 median home price) and younger boomers ($102,300, $251,100 respectively).

Younger millennials, meanwhile, are purchasing the least expensive homes and smallest homes ($177,000 and 1,600 square feet), meaning they face the greatest challenge in finding affordable inventory. They also report a median household income of $71,200.

Downsizing to a smaller home is not currently common among any of the generations. Sellers over the age of 54 only downsize by a median of 100 to 200 square feet. Gen Xers and boomers who may have been interested in downsizing could have been hindered by a lack of smaller inventory; or may have been impeded by the increase in multi-generational living.

Student loan debt remains a barrier to homeownership

Older millennials and Gen Xers carry the most substantial amount of student loan debt, with a median amount of $30,000. Younger millennials rank second with a median amount of $21,000. Younger and older boomers also report carrying student loan debt but a lower amount, 10 and 4 percent respectively.

Younger millennials were the most likely to say saving for a down payment was the most difficult task in the home process, 26 percent. “These buyers are the most likely to receive some or all of their down payment as a gift from family or friends, usually their parents,” says Yun. “This could explain why their debt is not holding them back from homeownership as long as other generations, who are less likely to receive down payment assistance.”

Homebuyer household compositions shift from married couples

While the majority of buyers in all age groups are married couples, single buyers and unmarried couples continue to make a mark on the real estate market. Single females accounted for 25 percent of all younger boomers and silent generation buyers.

While only 8 percent of buyers as a whole were unmarried couples, they accounted for 20 percent of all younger millennial homebuyers, compared to 13 percent for older millennials, 8 percent for Gen Xers, 4 percent for both younger and older boomers and 3 percent for the silent generation.