This morning the National Association of Realtors (NAR) published their Generational Trends Report. The report is based on one of my favorite datasets. It’s unique (it asks questions the Census bureau doesn’t). It’s granular (it breaks down responses by generation). Importantly, the survey is also long-running (this is the 12th annual report).

NAR’s commentary in the report focuses on the results from the latest survey. While that’s interesting stuff, the real value in the Generational Trends Report is the long history of data. After all, what we really want to know is how the market is changing, and we can’t know how it’s changing unless we look at the latest batch of data in a historical context.

Compiling this historical data is a lot of work! Each of the 12 Generational Trends Reports that have been published since 2013 is about 150 pages long. NAR doesn’t provide us (well, not me, at least) with the data in spreadsheet format. It’s a lot of manual tabulation. Luckily, ChatGPT (4.0) helped—I gave it all of the reports and had it generate data tables and analyze the text.

Here are the three themes we (the robot and I) found most interesting from today’s report.

Theme 1: For Millennials, demographics trump affordability

This edition of the NAR report is titled “2024”, but it shows the results of surveys sent to people who bought or sold a home between June 2022 and June 2023. For context, mortgage rates were skyrocketing and existing home sales were plunging during that period:

Today’s report showed that homebuyers—younger ones in particular—are coming to grips with the new, less hospitable homebuying landscape. It’s a tangible reflection of the fact that demographics trump affordability in the housing market. One out of four Millennial buyers reported buying because they had no choice.

Older Millennials in particular are starting families and need larger homes (two-thirds of them are married couples with at least one child). Higher costs put them on the back-burner in 2021-22, but their needs didn’t go away.

In 2022-23, older Millennials surged back into the second spot in the ranking of homebuyers (behind Gen X), and Millennials as a whole (older + younger Millennials) once again asserted themselves as the largest cohort of buyers.

Part of the reason Millennials are able to buy, despite tough conditions, is probably that they’re now older and more financially-established:

• 40% of older Millennials who bought in 2022-23 owned their previous home

• Relatedly, fewer had to dip into their savings to finance their downpayment (owning a home during the pandemic run-up in prices surely helped)

• 71% of older Millennials said the mortgage process was as they expected, or easier

Still, affordability is close to all-time lows, and this is apparent in other aspects of the data. In particular, buying a home was a tough process for young buyers with school debt. This is a large cohort, since Millennial buyers are a well-educated group: about a third of them have a graduate degree, and 10% of them have a doctorate.

Unsurprisingly, many of these buyers delayed their purchases due to education debt. 38% of younger Millennials reported saving for a downpayment was the most difficult task in the home buying process. 39% of these said student loans delayed saving enough for a downpayment (second only to high rent/current mortgage payment).

There is some evidence of financial distress among the youngest buyers (25 to 33 year olds). 31% of this age group reported selling their home very urgently, and needing to sell “as quick as possible.” I am speculating here, but this may have to do with the large drops in speculative stocks and cryptocurrencies during the survey period.

Theme 2: The profile of homebuyers does not reflect the population

I’ve written recently¹ about the massive gains in homeownership since 2015. These gains are happening not just among the richest or oldest (who’ve had time to accumulate wealth), but even amongst middle-income and younger households. Today’s NAR report corroborates this.

Despite high interest rates and prices, the percentage of first time home buyers rose almost all the way back to pre-pandemic levels.

The rise in homeownership is a feel-good story that I wish more people would talk about.

But today’s NAR report also shows a darker side to this story: those who are able to buy a home are still not reflective of the country, especially along racial lines. Even as the country becomes more diverse, homeowners have not. This is problematic from a business standpoint—fewer customers to transact with—as much as from an equity one.

Theme 3: Older Americans are competing less with younger buyers

The final theme, from which this article derives its title, is that Boomers are aging, and looking for housing options that are less similar to the ones younger people are searching for. This holds promise for an ebbing of the battle between Boomers and Millennials I have written about in Home Economics and elsewhere².

In particular, Boomers and members of the Silent Generation are increasingly buying in retirement communities. In 2022-23, a quarter of older Boomers bought this kind of housing. This is a sharp rise from just a few years ago.

Thanks for reading. Paying subscribers (signup here) who’d like to talk to me about using AI to do data analysis can book a one-on-one session with me for free, here.