Despite the general notion that young people are reluctant to enter the homebuying market, a study by the National Association of Realtors found that for the second consecutive year, those ages 34 and younger comprised the largest share of recent homebuyers.
Those millennials accounted for 32 percent of all buyers in 2014, down just slightly from 31 percent in 2013, according to the 2015 National Association of Realtors Home Buyer and Seller Generational Trends study.
Generation X, those ages 35-49, were second at 27 percent of the market. Younger baby boomers (ages 50-59) and older baby boomers (60-68) combined for 31 percent, with those ages 69-89 making up 10 percent of the buyer market.
“Over 80 percent of millennial and Gen X buyers consider their home purchase a good financial investment, and the desire to own a home of their own was the top reason given by millennials for their purchase,” NAR Chief Economist Lawrence Yun said in a news release.
The survey also found that most buyers search for homes online and then purchase a home through a real estate agent.
According to the survey, 13 percent of all home purchases were by a multi-generational household, consisting of adult siblings, adult children, parents and/or grandparents. The biggest reasons given for a multi-generational purchase were cost savings (24 percent) and adult children moving back into the house (23 percent).
The median age of millennial homebuyers was 29, their median income was $76,900 (up from $73,600 in 2013) and they typically bought a 1,720-square foot home costing $189,900 ($180,000 a year ago).
The typical Gen X buyer was 41 years old, had a median income of $104,600 (up from $98,200 a year ago) and purchased a 1,890-square foot home costing $250,000 (same as last year).
Seventy-nine percent of all buyers considered their home purchase a good financial investment, with millennials (84 percent) and Gen X (82 percent) having the highest share, followed by younger and older boomers (both 77 percent), and the Silent Generation (72 percent).
Generation X buyers (68 percent) were the most likely to be married, and younger boomers had the highest share of single female buyers (23 percent).
Although most purchases by all generations were in a suburban area, the share of millennials buying in an urban or central city area increased to 21 percent in the past year (19 percent a year ago), compared with only 12 percent of older boomers (unchanged from a year ago). Older boomers and the Silent Generation were more likely to buy in a rural area (18 percent each).
Among the biggest factors influencing neighborhood choice, millennials were most influenced by the quality of the neighborhood (75 percent) and convenience to jobs (74 percent). Convenience to schools was most desired by Gen X buyers and proximity to health facilities by the Silent Generation.
The study found that 88 percent of all buyers in the past year financed their purchase. Millennials (97 percent) and Gen X (96 percent) were more likely to finance than older boomers (72 percent) and the Silent Generation (61 percent). The median downpayment ranged from 7 percent for millennial buyers to 20 percent for older boomers.
Twelve percent of all recent buyers had delayed their home purchase due to outstanding debt. Younger buyers were more likely to finance their purchase with a Federal Housing Administration-backed mortgage, whereas older buyers were more likely to obtain a mortgage through the Veterans Affairs loan program.
All information is characteristic of the 12-month period ending in June 2014 with the exception of income data, which are for 2013.