NAR Home Buyers and Sellers Generational Trends Report

       The National Association of Realtors produces an annual report, the NAR Home Buyers and Sellers Generational Trends Report, breaking down the demographics of home buyers and sellers. The report is based on their Profile of Home Buyers and Sellers, published near the end of each calendar year. In the Profile of Home Buyers and Sellers, the NAR concluded the typical home buyer’s annual household income climbed to $107,000 in 2023. As a result, the demographics of generational trends for buyers and sellers changed as well.

There are a couple of distinctions that need to be made about the classifications defined in the report. First, Millennials are subdivided into two categories: Younger Gen Y / Millennials, aged 25-33, and Older Gen Y / Millennials, aged 34-43. Second, Baby Boomers are subdivided into two categories: Younger Boomers, aged 59-68, and Older Boomers, aged 69-77.

Let’s first take a look at the home buyer. In 2023, 32% of all home buyers were first-time home buyers. Despite some perception of the current real estate market, the first-time home buyer actually increased their market share from 26% in 2022. If we take a deeper look at the first-time buyer, we can see some pretty specific trends. 75% of Younger Gen Y / Millennials, aged 25-33, were first-time home buyers. 44% of Older Gen Y / Millennials, aged 34-43, were also first-time home buyers. However, in an interesting addition, Gen X, aged 44-58, actually captured the second highest market share for first-time home buyers at 54%.

As we look at buyers overall, a similar trend emerges. Millennials made up the largest percentage of home buyers at 38%, while Gen X followed with 24%. Married couples accounted for 59% of home buyers in 2023. As one would expect, the reason one purchases a home depends on the generation. In 2023, the line that defined the difference is the age of 59. Home buyers under the age of 59 are consistent with their desire to own a home of their own. However, those over the age of 59 cited a need to be closer to family and friends, or a need to downsize as their reason for purchasing a new home.

Home buyers in 2023 also provided some insight into how, and why, one selects their real estate agent.  The first impression proved paramount as approximately 70% of home buyers, across all generations, interviewed a single real estate agent before making their decision. Approximately 17% of home buyers interviewed two real estate agents before making their decision. In terms of the factors that mattered to home buyers in the selection process, there were a few consistent responses. Approximately 20% of home buyers identified experience as their most important factor in selecting a real estate agent. 18% of home buyers identified honesty and trustworthiness, and 16% identified the reputation of a real estate agent as their most important factor.

Now, let’s take a look at home sellers in 2023. Younger Boomers, aged 59-68, held the highest market share of home sellers at 26%. Their median age and income were 64, and $103,000. Gen X wasn’t far behind with 23%. In simpler terms, individuals over the age of 44 account for about 75% of the homes sold.  Married couples accounted for 65% of home buyers, with the highest represented group belonging to Older Gen Y / Millennials. Across all generations, there were basically three main reasons (outside of job relocation) one chose to sell their home in 2023. However, as with the buyers in 2023, there is a generational line that separates the reasons for selling one’s home. Approximately 27% of people under the age of 59 are looking for a larger home. Another 12% are looking to be closer to friends and family. For those over the age of 59, the main reason for selling one’s home was to be closer to friends and family. However, about 14% identified the second most common reason for sale to be a need to downsize.

The report also allows us to see the trends of home sellers, as a whole. 70% of those who sold a home in 2023 were repeat sellers. There is a dramatic shift at age 44. Approximately 83% of home sellers over the age of 44 were repeat sellers. The most encouraging statistic to emerge from the seller trends is the method of sale. 89% of homes sold in 2023 were represented by an agent or broker. The value of the real estate agent remains.

It's paramount in the changing economic environment to understand the clientele. The NAR Home Buyers and Sellers Generational Trends Report provides the opportunity to breakdown home buyers and sellers into segments. The elite real estate professionals understand their segments and target them, accordingly.