Homebuyer Purchasing Patterns by Generation: A Guide
The housing market is hot — and its reach is broad. Current homebuyers hail from four different generations, each of which follows different purchasing patterns. New research from the Home Improvement Research Institute explores these patterns and their drivers, creating a valuable resource that can help inform your decisions.
So, what are the homebuyer generations, and how do their unique characteristics affect the housing market?
Who is in the market for a home today?
The homebuying market reaches a wide range of buyers who fall into four generations, each with their own set of buying behaviors:
1. Millennials (1979 – 1996) Millennials make up nearly 25% of the population and, because many started their careers during the Great Recession, approach home purchasing and home improvement far differently than other generations. They are less likely to buy (vs. rent) and have less disposable income. Additionally, more than a third hold bachelor’s degrees or higher, and millennials are the least likely to be married.
2. Gen X (1965 – 1978) Nearly as educated as millennials overall, Gen Xers have the highest percentage of graduate degrees and, in general, have more spending money: Their disposable income is the highest of any generation.
3. Baby Boomers (1945 – 1964) Ninety percent of this group has been married at one time. Despite the fact that less than half of boomers are still in the workforce today, homeownership remains high.
4. Silent Generation (Before 1945) The Silent Generation makes up 7% of the population. While they have more leisure time than their younger counterparts, fixed incomes can restrict their spending.
How do different generations approach homebuying and home improvement projects on recently purchased homes?
While they started off slower, younger generations are leading the push today in homebuying, accounting for a third of home purchases.
In addition, the vast majority of millennials are first-time buyers. For the most part, they’re buying less expensive homes, opting for starter homes paid for with income as opposed to older generations who have accrued equity.
Motivation also changes as generations grow older: Younger generations simply want to own their own home while older generations have more specific ideals, such as living closer to family or downsizing.
Older generations are also less likely to compromise on wishlist items including a home’s size, condition and proximity to work.
Most purchasers take on some remodeling within the first year:
95% of younger millennials
87% of older millennials
85% of Gen Xers
74% of boomers
However, younger, new and recent home purchasers are more likely to take on home projects, purchasing fixer-uppers largely for the potential financial incentive. This group also identifies as DIYers.
Project purchases also vary across generations. Millennials focus on living and convenience rooms while many Gen Xers finish basements.
About half of millennials describe themselves as “heavy” or “moderate” DIYers. This group is comfortable replacing light fixtures, installing flooring and even tackling full-room remodels.
How do generational traits influence home improvement products purchased?
When it comes time to plan projects, younger homeowners spend more on products — for a median of $1,250 — as they are building up their repository of home improvement “staples” including hand and power tools. Contrarily, boomers spend a median of $630, since many already own these supplies.
Typical shopping behavior changes as generations grow older. Younger generations are more comfortable with online shopping and research.
Older homeowners do less research on products before purchasing and are more likely to have prior experience with that particular product, thus informing their decision. Millennials lead the groups with 31% performing extensive research from multiple sources.
However, “touch-and-feel” is still important as in-store purchasing is still the most prevalent way to shop. Nearly half of boomers and 54.6% of the Silent Generation prefer going to a store. As a comparison, 38.5% of Millennials and 39.7% of Gen X feel the same way.
While technology is frequently producing the latest gadgets, older generations are likely to take a more conservative approach to what types of products they purchase — less than a third of both boomers and the Silent Generation want the latest gadgets. Meanwhile, 72.6% of millennials and 58.3% of Gen X desire the latest and greatest products available.
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