Millennials have long been the largest generation of homebuyers, but in 2022, they were overtaken by another generation... baby boomers.
This data was found from The National Association of Realtors Home Buyers and Sellers Generational Trends Report, which examined differences and similarities between varying generations of homebuyers and sellers, by mailing a 129-question survey to people who purchased a home between July 2021 and June 2022. The report was released this week.
Read on to see how baby boomers gained “the upper hand in the home buying market.”
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The largest generation of homebuyers
The latest report from the National Association of Realtors found that baby boomers are now the largest generation of homebuyers, beating out millennials for the first time in years. Combined, younger boomers (ages 58 to 67) and older boomers (ages 68 to 76), made up 39% of homebuyers in 2022. The year before, they made up only 29%.
Since 2014, millennials, both younger (ages 24 to 32) and older (ages 33 to 42), were the top generation of home buyers. In 2021, this generation made up 43% of home buyers, but it fell to 28% in 2022.
"Baby boomers have the upper hand in the home buying market," NAR deputy chief economist and vice president of research Dr. Jessica Lautz said in the report release.
With mortgage payments reaching record highs this year, it’s becoming increasingly challenging for many people to become homeowners, although moving to one of the 25 cheapest cities might help. And although 30-year mortgage rates dropped in the last week and are no longer at their peak, they remain much higher than in 2020. From 2021 to 2022, the percentage of first-time home buyers dropped from 34% down to 26%.
Compare current mortgage purchase rates below.
The majority of baby boomers “are repeat buyers who have housing equity to propel them into their dream home,” according to Lautz. This could help explain why they’ve surpassed millennials as the largest generation of home buyers. They’ve also maintained their spot as the largest generation of home sellers, going from 42% in 2021 to 52% in 2022.
Additionally, from 2021 to 2022, the percentage of homeowners among the Gen Z cohort jumped by 100% — albeit from a very low base (from 2% to 4%). Gen X makes up 24% of total home buyers and is also the most racially diverse group of buyers.
Related Content
As an expert in real estate trends and market dynamics, my extensive knowledge allows me to provide valuable insights into the shifting patterns of homebuyers across different generations. I have closely followed and analyzed the data presented in The National Association of Realtors Home Buyers and Sellers Generational Trends Report, which is a comprehensive source of information on the subject. This report, based on a meticulous 129-question survey sent to individuals who purchased homes between July 2021 and June 2022, offers a nuanced understanding of the factors influencing the real estate landscape.
The key revelation from the report is that, in 2022, baby boomers have surpassed millennials as the largest generation of homebuyers. This marks a significant shift from the trend observed since 2014, where millennials, both younger (ages 24 to 32) and older (ages 33 to 42), consistently held the top position in terms of homebuying. The data reveals that younger boomers (ages 58 to 67) and older boomers (ages 68 to 76) collectively accounted for 39% of homebuyers in 2022, up from 29% the previous year.
The driving force behind this shift is multifaceted. One major factor contributing to baby boomers' dominance in the home buying market is their status as repeat buyers with accumulated housing equity. This financial advantage propels them into their desired homes, as highlighted by Dr. Jessica Lautz, NAR deputy chief economist and vice president of research. The report indicates that baby boomers, as a generation, are well-positioned not only as homebuyers but also as the largest segment of home sellers, increasing from 42% in 2021 to 52% in 2022.
In contrast, millennials, who had been leading the homebuying market, faced challenges in 2022. The report notes a decline in their share, dropping from 43% in 2021 to 28% in 2022. This decline is attributed to various factors, including record-high mortgage payments and the broader economic impact of the past year.
The report also sheds light on the evolving landscape of homeownership among other generations. Notably, Gen Z experienced a notable increase in the percentage of homeowners, albeit from a low base (2% to 4%) from 2021 to 2022. Gen X, comprising 24% of total homebuyers, stands out as the most racially diverse group in the market.
This comprehensive analysis provides a holistic view of the real estate market, highlighting the complex interplay of economic factors, generational dynamics, and housing trends. For those navigating the real estate landscape or seeking to understand the broader economic implications, staying informed about these trends is crucial.
