From Boomers to Millennials: How Has Buying a Home Changed?

From Boomers to Millennials: How Has Buying a Home Changed?

Step aside boomers and Gen X-ers; Millennials make up the largest share of first-time home buyers in the U.S right now, and they’re making the housing market their own.

And they have to, since millennials are inheriting a housing market that’s wildly different than the one their parents first waded into in the 1980s, back when John Hughes ruled the silver screen, hair metal ruled the airwaves, and pastel leg warmers just straight-up ruled.

So just how different is the housing market today versus 30-plus years ago? Realtor.com took a good look at some statistics that we found pretty amazing. Here’s how the housing market of today compares to your parents’ market in 1985:

1.) The Age of Homeowners is Steadily Rising

Increasingly, millennials are putting off major milestones that their parents once took for granted, including marriage and home ownership. The median age of home buyers was just 33 years old in 1985; as of 2015, the median age was 44, according to data from the National Association of Realtors. What’s behind the jump? Millennials face a mountain of student loan debt and a more uncertain job market than most generations in American history, and a more mature career salary is a must for many to buy in today’s market. And speaking of money…

2.) Home Prices Are Substantially Higher Today (And Still Rising)

Home prices have been steadily increasing for years now, despite the impact of the Great Recession. While a millennial’s family probably paid around $80,000 for their home circa 1985, that young person today is looking at a median sale price around $222,400 – about 2.75 times higher. 

This steady climb in prices has led to historic low home ownership rates, with the Census Bureau reporting a homeownership rate of 63.7% in 2015 (the lowest rate since 1989).

Is there good news for millennials? According to the Census Bureau, household income has increased 127%, from $23,618 in 1985 to $53,657 in 2014 (the latest data available). Another positive? Mortgage rates for home buyers in the '80s hovered just above 12%; today, rates are just above 4%.

3.) The Nuclear Family Has Gone Bust

In addition to the increase in age, the relationship status of homeowners has shifted enormously since the 1980s. Thirty year ago, married couples made up a staggering 81% of all homeowners. Today, that number has fallen to just 67%, and the numbers of single males (9%), single females (15%), and unmarried couples (7%) are all on the rise.

And as for Dick and Jane? American families are slowly but surely shrinking, from 2.69 people per household in the 1980s to 2.54 today.

4.) Homes Have Gotten Bigger…

In 2015, the average size of a purchased home was 1900 square feet, a step up from the 1610 square feet expected in 1985.

Correlating to this rise in available space? Number of bathrooms! While you may have grim memories of banging on your home’s one bathroom door as a kid, waiting for your older sister to finish drying her hair, your kids probably won’t have to worry. Most for-sale homes on the market today have at least two bathrooms, and new constructions are typically being built with at least three.

5.) … And Homes Are Getting More Luxurious

Score one for the millennials: The standard of living has steadily increased since the 1980s. Amenities that we take for granted today – like dishwashers and central air – were only in about half of homes in the 1980s, according to the American Housing Survey, while the smart home technology that so many of us use today seemed like an impossible sci-fi dream.

Whether you’re a boomer, a millennial, or a Gen X-er, we believe that the Chicago real estate market is ready for you. Want to get started on the search for your dream home? Drop Real Group a line today!

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