Despite that fact that a high percentage of Millennials are saddled with debt, in particular student loan debt, they have more confidence than any other age group that their recent home purchase was a sound financial decision, according to a survey conducted by the National Association of Realtors (NAR).
According to the NAR's inaugural ‘Home Buyer and Seller Generational Trends’ report, 85% of recent homebuyers under the age of 32 feel that their home purchase was a good financial investment.
Overall, eight out of 10 homeowners felt they had made the right financial decision.
The report breaks down the attitudes of recent homebuyers toward their purchase decision by generation. The largest group of recent buyers was Generation X Americans, those born between 1965 and 1979, who comprised 31% of recent purchases. They were followed by the Millennials, born between 1980 and 2000, who represented 28% of recent buyers.
The percentage of recent home purchases among prior generations was significantly lower. Younger Boomers, born between 1955 and 1964, represented 18% of recent buyers, while Older Boomers, born between 1946 and 1954, represented 14%. The Silent Generation, born between 1925 and 1945, represented only 10% of recent buyers.
The survey covers and compares a wide array of home buyer data. For example, the median income of Millennial home buyers was $66,200. They typically bought a 1,700-square foot home costing $165,000. The median income of a typical Gen X buyer was $93,100. They typically purchased a 2,100-square foot home costing $235,000.
Interestingly, the survey reveals that older home buyers prefer newer homes, while younger home buyers are more inclined to buy older homes. Millennials, for example, typically bought homes built around 1986, nearly a decade older than homes typically bought by the Silent Generation.
Other results are arguably less surprising: For example, younger buyers took into account factors such as type of neighborhood, convenience to jobs, affordability and quality of the school district when purchasing a home, whereas older generations placed higher importance on convenience to family and friends and healthcare facilities.
The survey also reveals that younger buyers have a tendency to stay closer to their previous residence, often staying within 10 miles, whereas older buyers moved longer distances, typically more than 20 miles from their previous home.
In addition, younger buyers were more likely to buy in an urban or central city area than older buyers. About 21% of Millennials bought a home in an urban area, compared to 13% of Older Boomer and Silent Generation buyers.
"The oldest of the Millennial generation are now entering the years in which people typically buy a first home, and despite the recent downturn, homeownership still matters to them,’ noted Paul Bishop, NAR vice president of research. ‘The sheer size of the Millennial generation, the largest in history after baby boomers, is expected to give a powerful boost to long-run housing demand, though in the short-term, mortgage accessibility and student debt repayment remain challenges."
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