Homebuyer Purchasing Patterns HERO

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.

HIRI mem­bers have com­plete access to qual­i­ta­tive and quan­ti­ta­tive data sur­round­ing pur­chas­ing habits and addi­tion­al per­cep­tions. Data includes com­plete reports and curat­ed sum­ma­ry insights. Log in to get the lat­est stud­ies and down­load reports or join HIRI for access today.

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