As baby boomers remained the largest generational group of home buyers over the last year, the share of first-time buyers plunged to its lowest level on record, according to a sobering study released on Wednesday by the National Association of Realtors.
First-time buyers made up 21% of all purchases — roughly one in five — according to the report. That’s down from 24% over the previous year and the lowest share recorded by NAR since 1981.
One of the primary reasons for this, in part, sent New York City voters to the polls in droves last November: an ongoing affordability crisis. But in this case, it has its worst impact on younger Americans.
“The housing market remains sharply divided between homeowners with equity and first-time buyers trying to break in — many of whom are younger millennials,” said NAR deputy chief economist Jessica Lautz in the report. “For many younger households, affordability challenges and limited inventory are still making homeownership difficult to achieve.”
For their part, baby boomers — born between 1946 and 1964 — comprised a 42% share of buyers, which remained unchanged from last year. These older Americans benefit from the equity gained from homes they previously sold — and likely lived in for some time as they raised families.
Both the silent generation, the eldest Americans born between 1925 and 1945, and Gen Z, who were born between 1999 and 2011, made up the smallest share at 4% each.
Younger millennials — those born between 1990 and 1998 — made up the largest share of first-time buyers over the past year, at 60%. That marks a loss in market share, as that figure is down from the 71% tallied the previous year.
Older millennials, meanwhile — born between 1980 and 1989 — are moving their way up in the world, and that’s manifesting in home purchases. The report says they have the highest median household income of any generation at roughly $133,000, purchased the largest dwellings with a median 2,100 square feet and were less likely to be first-time buyers than younger millennials.
“Older millennial buyers are now entering middle age, and with that comes a shift,” Lautz adds in the report. “This cohort is now the highest-earning generation of home buyers, buys the largest homes and is most likely to have children living with them. Those traits were once more commonly associated with Gen X buyers, who are now increasingly looking toward empty-nesting and retirement.”
But, of course, that’s if older millennials are lucky enough to come across those properties.
While some boomers are lucky enough to shop and buy, others in that age group are choosing to stay put in their larger homes, according to a Redfin study released in early April. Empty-nesters in that generation own more than a quarter of the nation’s largest homes — making it difficult for millennials with children to find family-size dwellings. The younger generation only own some 16% of large homes with three bedrooms or more.
“Young adults do not lack ambition,” Shai Reshef, president of the University of the People in California, told the Daily Mail. “They are navigating a world where student loan payments, inflated housing costs and tighter lending standards make it much harder to save for a down payment or qualify for a mortgage.”
“That is why many people in these generations believe homeownership has become less a milestone and more a financial hurdle,” he added to the outlet.
