May 13, 2019
Changing Homebuyer Demographics—and Why it Matters
by Carrie Scheetz
Last week we talked about the changing demographics of the workplace and how they could impact how we do business. I thought it would be interesting to follow up by exploring another trending demographic change among another critical audience for fenestration professionals: homeowners and homebuyers.
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In April, the National Association of Realtors (NAR) released its 2019 Home Buyers and Sellers Generational Trends Report. Millennials are conclusively found to be the largest generation of buyers in today’s market at 37 percent—and this year’s report even goes as far as breaking the generation into “younger” and “older” millennials.
The largest cohort in America is growing up and becoming more traditional in their buying habits. Older Millennials had the largest buyer share of married couples (69 percent) and were the most likely to have children under the age of 18 living at home (58 percent). Commuting costs were most important to both Millennials groups and they purchased their homes closest to their previous residence. They were also the most likely to make compromises on their home purchase and had the shortest expected tenure in the home at 10 years.
Many of these buyers are first timers, too: “Fifty-two percent of buyers 29-38 years and 86 percent of buyers 28 years and younger were first-time home buyers,” the report notes.
Another study conducted by Realtor.com further narrows down some emerging homebuyer demographics for 2019. Interestingly, these inferences were made based on an analysis of first names on 2018 home sales deeds.
The faces behind home sales are changing quickly, and while the Hannahs and Austins still have a long way to go to catch up with the Michaels and Johns, they are closing the gap. Buyer data on home sales for the first nine months of the year not only reveals a fun mosaic of names participating in today’s housing market, but also a sneak preview into key emerging trends. The analysis, while limited in interpretation, uncovers a story of sales increasingly skewing toward three key demographics: Millennials, Women, and Hispanics. Names associated with these groups are taking a larger share of all sales, and rapidly changing the landscape of the U.S. housing market.
RealTrends.com notes another interesting tidbit: The working assumption that millennials are the “renting” generation could be changing. Millennial home sales in 2018 increased by 5.3 percent, outpacing other generations in the homebuying market. This is in part because millennial homebuyers seem to be flocking toward affordability, which has been a significant hurdle in their general ability to own real estate: “Geographically, millennial buyer names are particularly overrepresented in Kansas, Indiana, Louisiana, Missouri, and Utah—states where housing affordability remains above national levels—confirming that jobs and availability of entry level homes act as magnets for young buyers,” RealTrends says.
A recent report out of Texas—one of the country’s hottest markets—correlates with some of these findings too. As reported by The Houston Chronicle, “The average first-time homebuyer in Texas is 32 years old, married and settling into a house for at least a decade,” right in the middle of the millennial age distribution.
For fenestration professionals, these sorts of shifts in homebuyer demographics is useful information. Millennials will soon overtake Baby Boomers as America’s largest generation. A young homeowner planning to stay put for a decade may at some point consider replacing his windows and doors, and knowing how to successfully market to that audience is key. And while there has been plenty of ink spilled about the best way to reach millennials, some of those techniques are naturally changing as the generation becomes more mature.
This recent blog from Taboola highlighted a few things I found interesting: “Millennials appreciate tech because they saw it grow up as they did ... they don’t blindly swear allegiance to every last digital tool, but instead, favor services that offer practicality, utility, fun, savings, and convenience,” says Taboola. “New media has helped make millennials master fact-finders. It’s made them relentless rejecters of traditional advertising, which they both filter and ignore. Their BS detectors are strong.”
So, while there’s really no magic bullet to be found here, there is perhaps a guiding principle: The soon-to-be largest American generation, with hundreds of billions of dollars in buying power and the future of homeownership, responds positively to genuine and helpful marketing. Infusing that in everything we do—no matter what form it takes—is a key to success.
Questions or comments? Contact me directly at Carrie.Scheetz@Quanex.com.