Homebuying Demands for Millennials and Generation X are More Alike than Dissimilar

Unlike the Baby Boomer generation that is generally accepted as being born over the 19 years covering 1946-64, varied definitions exist for the following Generation X or the more recent Millennials. From our perspective, the most logical segmentation would be of equal year ranges for the best comparability, leaving Generation X as being born from 1965-1983 and Millennials as born from 1984-2002. Demographers at the Joint Center for Housing Studies would similarly agree with this approach.

However, as an example of different approaches, in a sizeable national housing survey published last month, Zillow Group defines Millennials as being born from 1980-99 and Generation X spanning fewer years from 1965-1979. While there is no "right” answer, we note the variances because how the generations are defined can influence the conclusions.

Setting aside the varying definitions, in the Zillow Group survey, we found it quite interesting that in spite of the widespread perceptions about how different Millennials are from their older cohorts, their requirements and priorities during their homebuying process are actually quite similar.

More specifically, across 19 different characteristics about the neighborhood and home required by recent home purchasers, the first seven priorities were the same for buyers 18-37 and 38-52 years old, led by the safety of the neighborhood, fitting their budget, having the right number of bedrooms and having air conditioning.

The same was true on the other end of the spectrum. The four least required characteristics were also aligned, including the need for shared community amenities and the proximity to public transportation, shopping and family or friends.

In fact, a material deviation in priorities was only visible in four of the 19 categories. Younger buyers put a higher premium on the requisite utilities and more personal parking – an interesting side note given the perception that young adults have de-emphasized the tradition of car ownership. Meanwhile, older buyers are more specific about having ample storage (as they have had more time to accumulate belongings) and less willing to sacrifice their preferred neighborhood.

These conclusions are consistent with our own demographic research that continues to suggest that young adults are being young longer as marriage is delayed or forgone and children enter the family equation later in life. However, once they reach their family formation period, interests, priorities and housing choices mirror prior generations quite closely. To be sure, the evolution of technology and increased college participation among young adults affect housing more so today than in the past, but we simply believe that the perceived secular shift has been over-stressed in recent years as recessionary effects have too often been misconstrued as a new, sustainable trend.