Many people buy houses, but what are the specific reasons for those purchases? The answers may surprise you.
Why did American consumers purchase homes in 2014? And how did those reasons differ generation to generation?
In our continuing coverage of NAR’s 2015 Generational Trends report, we delved into the data to answer that very question, and emerged with some very interesting findings.
First, here were NAR’s findings for all homebuyers:
Three things immediately jump out in that graph: the overwhelming desire among consumers to simply own a home; the No. 2 and 3 reasons (relocation and family situation) being more of necessity than desire; and the affordability of homes ranking so low.
We took a closer look at how those stats broke down across generational lines, and the findings were even more interesting. Case in point:
•The desire for homeownership was by far the strongest among Millennials, with 39 percent buying out of a want to own; that’s a full 16 percentage points higher than second-place Gen X, and clearly indicates that Millennials are not indifferent to homeownership.
•When it came to buying for relocation purposes, both Gen X an Younger Boomer buyers were the most prevalent, with 12 and 16 percent, respectively, buying for that reason.
•Among several other lesser-common reasons, Gen X buyers were by far the most representative: 13 percent of Gen X buyers did so for a changing family situation; 12 percent did so out of a desire for a better area to live; and 10 percent did so out of a desire for a bigger home.
•On the opposite end of the spectrum, 13 percent of Younger Boomers bought out of a desire for a smaller home.
•And finally, 15 percent of Older Boomers (and 5 percent of Silent Generation members) bought their homes for retirement purposes.
One final statistic to consider – as we mentioned earlier, reasons of necessity (job relocations, changing family situations) were far more common than any market-based reasons, and in a very surprising touch, both affordability and tax benefits rated very low on why consumers purchased homes; in fact, when it came to tax benefits, just 3 percent of Millennials and Younger Boomers bought for that reason, and they were at the top of the pack!