Housing trends by generation: Gen Z, millennials, boomers

December 16, 2022 12:46 PM

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Just like their varying tastes in clothes and music, each generation of consumers today have unique preferences on where and how they want to live. Millennial and Gen Z adults, for example, are choosing to live in luxury rentals rather than buy property in the nation's capital. Meanwhile, in a reversal of trends from generations before them, many boomers do not wish to downsize and are in fact "aging in place."

For more on these stories and other housing trends affecting homebuyers in the different generations, read our roundup below.

capitol hill building aerial view, Washington DC

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Young adults prefer luxury rentals over buying in D.C.

Millennial and Gen Z individuals looking to live in Washington D.C. face a difficult time deciding whether to rent or buy in a complex market where the monthly rent is 1.7 times higher than the national average and house prices are 1.9 times higher.

With younger generations feeling they cannot afford to buy — although D.C. realtors would argue differently — many are rethinking owning a home and choosing instead to rent in apartment buildings that offer the types of amenities they value, such as pools and gyms.

D.C. is also seen as a transitional city where young people come to work for a few years before moving elsewhere to settle down, making renting a more attractive short-term option than buying.

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Millennials, Gen Z in D.C. opt for luxury rentals over buying

Happy senior couple from behind looking at front of house and car

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Majority of older homeowners plan to age in place

A majority of the nation's older homeowners plan to age in place and leave their home, or the money from a sale of their home, to their family, a Freddie Mac survey finds.

Among adults aged 55 years and older, 70% of respondents said they'd pass along their home or the wealth generated from it to their children or family members. The age range includes baby boomers and the oldest Generation Xers, born between 1965 and 1980.

Of 2,249 Freddie Mac respondents, 66% said they plan to age in place, a share up 3% from 2016. Only 27% of homeowners 55 years and older said they feel confident they'd move again, while 36% said they wouldn't move. The remaining 37% were unsure of their plans, but Freddie said the numbers suggest older Americans aren't ready to leave.

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Majority of older homeowners plan to age in place

Fashionable cities bring out the homebuyer in Gen Z adults

Stylish metropolitan areas are proving to be a draw to young adults who are looking to take their first steps in the housing market, according to the latest analysis by LendingTree.

Equipped with high credit scores and good savings, Gen Zers appear ready to buy much earlier in life than the millennial generation and are responding in significant numbers to the advantages and incentives in certain markets much more so than others.

With the top spots spread across the nation, it's clear that despite their age, Gen Z homebuyers know what they are looking for and where.

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Gen Z, millenials and boomers alike pause house hunts when rates rise

The search for a new home has become so difficult that homebuyers looking to purchase across all generations, from baby boomers to Gen Z, are pausing their efforts or dropping out altogether.

According to the NAHB's Housing Trends Report, the primary causes of this worrying trend are rising mortgage interest rates and increased property prices, raising concerns about affordability.

"A growing segment of prospective home buyers aren't moving past the planning stage," said Rose Quint, assistant vice president for survey research at NAHB. Worse still, "higher mortgage rates and double-digit growth in home prices are discouraging buyers from engaging in the purchase process," said Quint.

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More house hunters are giving up on the search

Younger generations are open to buying a home at auction

The ability to save money, buy faster and bid online or by app are the top reasons why millennial and Gen Z homebuyers are entering the housing market in a non-traditional way — by auction.

The 2022 ServiceLink State of Homebuying Report revealed as one of its key findings that as many as 55% of millennials and Gen Z have either bought and would be prepared to buy a home at auction.

"Our study suggests that a growing number of buyers are embracing technology, and many are open to new pathways to achieve homeownership," said Dave Steinmetz, president of origination services at ServiceLink.

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Younger buyers seek alternatives to traditional home buying

Large metros prove attractive to millennial homebuyers

Some of the largest metro areas in the country are turning out to be housing market magnets for millennials, the generation with the lowest percentage of homeowners at just 43%.

But while homeownership rates are low, as potential homebuyers, millennials are the largest generational group and the perfect age to be entering the market.

And what makes them want to take the step into homeownership? The dynamic life, accessibility to nature, affordable down payments, potential equity growth and high-paying jobs in the nation's top cities.

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Gen Zers learn about lending from mortgage 'influencers' on TikTok

The phrase 'short and sweet' could have been invented for TikTok, but is this the right medium to be using to reach young homebuyers?

Some forward-thinking mortgage "influencers" believe the answer is yes and they've been quick to embrace the social media channel. With 60% of TikTok users in Gen Z and nearly 68 million soon-to-be homebuyers in the age group, the platform offers huge potential to others who are ready to join them.

NFM Lending's Chief Business Development Officer Greg Sher, who leads the company's Influencer Division has built automation around the leads generated from the comments section in TikTok videos. He says engagement on the app has led to hundreds of new connections with the borrowers of tomorrow.

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How lenders are using TikTok to reach Gen Z mortgage borrowers