Generation X and Generation Y buyers tend to spend more for their first home than baby boomers and this represents a larger portion of their household income, according to a Century 21 Homebuyer Survey released this week.
On average, the impact on the household income was 21 percent of boomers’ income as compared to 25 percent of Generation X and Generation Y’s household income.
The survey also reveals that baby boomers were driven to purchase their first home based on family reasons, while Generation X and Y buyers are more likely to buy or have bought a home as a “safe investment.”
In addition, Generation X and Y buyers tend to take longer to buy their first home as compared to baby boomers. Today’s Generation Y buyers are also purchasing first homes at a younger age than their Generation X and baby boomer counterparts.
The national online survey collected responses from 1,514 U.S. home buyers and was equally distributed among baby boomer (people born between 1946-64), Generation X (born between 1965-78) and Generation Y (born between 1979-94) consumers. The study was conducted by International Communications Research for franchisor Century 21 Real Estate LLC.
Today’s Generation Y first-time home buyers are younger than their Generation X and baby boomer counterparts. The average age for first-time home buyers was 26 among Generation Y respondents, which is three years younger than Gen-X (29) and baby boomer (29) survey participants.
Of the survey respondents, the average boomer polled was 51 years old, followed by Generation X at 34 and Generation Y at 25. Among those polled, 72 percent of Generation Y respondents were single women, followed by 56 percent of Gen-Xers and 59 percent of baby boomers. About 25 percent of Gen-Xers surveyed are single and have not married, compared to 5 percent of baby boomers.
Baby boomers were more likely to have purchased a first home based on a life event, including marriage or birth of a child. Their counterparts, Generation X and Y buyers, tend to purchase a first home based on its appreciation value, according to the survey responses.
“Safe investment” is a key driver among Generation X (42 percent of survey respondents) and Generation Y (39 percent) versus 35 percent of baby boomers who are more likely to invest in a first home for “family reasons.”
Baby boomers identified price as a key concern when purchasing a home (51 percent) as compared to Generation X (42 percent) and Generation Y (39 percent). Generation X (8 percent) and Y (10 percent) buyers are more concerned with proximity to work for their first home as compared to boomers (4 percent), according to the survey.
A majority of baby boomers (53 percent) ranked real estate brokers and agents as their primary source for shopping for information on their first home, followed by 45 percent of Generation X and 34 percent of Generation Y buyers. Generation Y home buyers (42 percent) search the Internet more than their Generation X counterparts (26 percent).
About 40 percent of all survey respondents noted that the best way to find a broker or agent was through friends and relatives. About 21 percent of Generation X and Y members use the Internet to find an agent to work with for their first home purchase, while about 17 percent of baby boomers used yard signs to find a broker or agent in their first home purchase.
In all three groups of buyers, the majority preferred more frequent contact from their broker or agent when buying a first home (more than 50 percent want contact every few days), according to the survey.
Generation Y respondents ranked the Internet as their primary source of home-shopping information, though it took them longer on average to purchase their first home. Baby boomers were the quickest first-time home shoppers polled, averaging 4.3 months to buy their first home, followed by Generation X at 4.6 months and Generation Y at 5.4 months, according to the survey.
Baby boomers (26 percent) are more likely to stay in their first home for more than 10 years as compared to Generation X (13 percent) and Generation Y (9 percent).
Today’s youngest home buyers are more likely to live with family to save money than other groups. Of those polled, more Generation Y buyers (22 percent) live with parents or in-laws prior to purchasing their first home as compared to baby boomers (3 percent) and Generation X (7 percent).
About 11 percent of baby boomers said size is important in a dream home. About 17 percent of Generation X buyers and 19 percent of Generation Y buyers stated that their ideal homes are over 5,000 square feet. The average size of a dream house for boomers is the smallest at 3,340 square feet, with Generation X at 3,840 square feet and Generation Y at 3,810 square feet. In reality, the average size of a first home is about 1,546 square feet, according to the 2005 National Association of Realtors profile of home buyers and sellers.
About 33 percent of baby boomers cite the Southeast as the dream home location vs. 27 percent of Generation X and 25 percent of Generation Y buyers.
Younger buyers are attracted to the Northeast as the location for their dream home, the survey revealed. About 22 percent of Generation Y and 18 percent of Generation X buyers prefer this region, compared to 9 percent of boomers.
The Southeast and Southwest are the two favorite regions for a second home for all groups of home buyers surveyed. The Northeast is favored by Generation Y buyers (14 percent) ahead of boomers (9 percent) and Generation X (11 percent).
The survey including responses from first-time buyers in their first year of home ownership along with active first-time home shoppers, and was conducted from March 17-31.
The Century 21 system includes about 7,800 independently owned and operated franchised broker offices in 42 countries and territories worldwide.