Maybe we have to start redefining the living habits of Next Gen. After years of press about Gen X and millennials craving the live/work/play dynamic of the Big City, the National Association of REALTORS® (NAR) indicates that homebuying is also on their radar. Chalk one up to the aging process.
According to NAR’s Home Buyer and Seller Generational Trends study, in the 12-month period that ended in June of 2018, one in six Gen Xers purchased a multi-generational home, “overtaking younger boomers as the generation most likely to do so.” What’s more, the majority—52 percent—of those Gen Xers said they did so because their adult children have moved back in or never left.
"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."
Nevertheless, the younger crowd will have challenges. On one hand, according to NAR, older millennials are now hitting their peak earning years, with a median household income of $101,200. Gen Xers, farther along the path, are pulling in $111,100 per household. Younger millennials are bringing up the rear, with household incomes of $71,200.
For all three cohorts—to use the popular terminology—student loans still present a barrier to the American Dream, as NAR reports: “Older millennials and Gen Xers carry the most substantial amount of student loan debt,” roughly $30,000. Younger millennials rank second with a median amount of $21,000.
“However,” the report continues, “younger millennials are the most likely to have student loan debt, with 47 percent indicating that they carry some amount of student loan debt, while only 42 percent of older millennials and 27 percent of Gen Xers report student loan debt. Younger and older boomers also report carrying student loan debt but a lower amount, 10 and four percent respectively.”
The impact, if any, on the multifamily market was not part of the NAR press statement. To read the full statement, please click here.
About the Author
John Salustri is editor-in-chief of Salustri Content Solutions, Inc., a consultancy focused on enhancing the web and print content of clients around the nation. He is a regular contributor to JPM Magazine and a frequent blogger for IREM. Prior to launching SCS, John was founding editor of GlobeSt.com.