Real Estate Trends 2023: The homes we bought, and why we bought them
In 2013, the National Association of Realtors® (NAR) started producing an annual report on buying and selling trends across generations. It’s full of good information, but it’s also 130-plus pages long. We’re sharing highlights from the 2023 report to save you from the search. (If you want to read the full report, the link is at the end of this article.)
Today we’re looking at the report’s Characteristics of Homes Purchased. One striking feature is the similarity in certain results across all generations. If you envision Millennials buying condos and Gen Z planning to move every two years, prepare for some surprises.
Single-family homes rule
No matter what your age, if you bought a home, it was overwhelmingly single family and detached. No other house styles were even close. From a high of 88% of Older Millennials (age 33-42) to a not-so-low 69% of Gen Z (age 18-23), the single-family home was the dwelling of choice. You could argue that there are more single-family homes than any other type of housing, so of course that’s what people bought. The important takeaway is that it’s the top choice for all ages.
Give me a 1986, 1,800 square foot, 3/2, please
It’s the configuration for everyone: The median year built (1986), square footage (1,800) and number of bedrooms (3), and bathrooms (2). There are variations, of course. Older Baby Boomers (68-76 years old) bought the newest homes (1996) while Gen Z bought the oldest (1976). Gen X (43-57 years old) bought the biggest houses (1,970 square feet) while Gen Z bought the smallest (1,480 square feet). The Gen X peak of 1,970 drops to 1,800 for Younger Boomers (58-67 years old), when downsizing starts to factor into home purchase decisions.
One thing the generations agreed on with little variation was the number of bedrooms and bathrooms in their floor plan. 3/2 was the median across all ages. Common sense says people can only buy what’s on the market, so if the housing supply was dominated by 3/2s, that’s what sold.
Why we buy what we buy
The great divide for homebuyers was new construction vs. previously owned. The factors driving those decisions were primarily personal, with one big market-influenced exception. The first thing that sticks out is this: 41% of all new homebuyers wanted to avoid renovations, plumbing, or electrical problems. Older Millennials REALLY didn’t want to deal with these issues! 54% percent of them listed that as a reason to buy new.
The second most popular reason to buy new was a lack of inventory of previously owned homes. That’s a continuing reality of the real estate market. Contributing factors include the COVID-19 pandemic, which created a work from home culture and made moving difficult, low interest rates and their subsequent rise, which made people less interested in moving, and an increase in property investors, who buy to rent.
Price and better overall value were the drivers for those who preferred to buy previously owned homes. 31% of all buyers mentioned price, with Gen Z buyers coming in as the most price-conscious at 51%. Price concerns dropped in older buyers, while overall value became more important.
We bought it and we’re staying put
When we buy a home, we plan to stay a long time. 61% of Younger Boomers expected to be in their homes for 16 or more years. Interestingly, 52% of Gen Z said the same thing, as did 47% of the Silent Generation (77-97 years old). Younger Millennials (24-32 years old) expected they’d move sooner, with only 38% saying they’d stay 16 or more years.
We want environmentally friendly features
Almost all buyers agreed that their top environmental concern was heating and cooling costs. Windows, doors, and siding came in second. Only Gen Z reversed that trend, with windows, doors, and siding listed as more important than heating and cooling costs. The two are clearly related, since good quality materials will result in energy efficiency. Maybe Gen Z is just planning ahead for the many years they expect to live in the homes they bought?
Whether you want to buy a single-family detached home or a condo in a high rise, we have a loan for you. Contact us.
About the National Association of Realtors® Generational Trends Report
The National Association of Realtors® 2023 Home Buyers and Sellers Generational Trends Report was researched and written by the National Association of Realtors® Research Group. It’s based on data gathered from primary residence homebuyers who purchased their properties between July 2021 and June 2022. For more information or to see the full report, visit https://www.nar.realtor/research-and-statistics
Stay ahead of the curve with our comprehensive insights on real estate trends in 2023. Discover valuable data on home buyer demographics and make informed decisions.
The National Association of Hispanic Real Estate Professionals (NAHREP) has released its annual report for 2022. Here's some key takeaways from the report.
Will renovation costs go down in 2023? It depends. Get the latest trends in renovation costs including material prices and more to make an informed decision.
The Biden-Harris Administration announced lower FHA mortgage insurance premiums. Find out how this can mean savings for new homebuyers.