The CENTURY 21(R) Homebuyer Survey released today reveals that baby boomers
were driven to purchase their first home based on family reasons while
Generation X and Y buyers are more likely to buy or have bought a home as a "safe
investment." In addition, Generation X and Y buyers tend to take longer to buy
their first home as compared to baby boomers. Today’s Generation Y buyers are
also purchasing first homes at a younger age than their Generation X and baby
boomer counterparts.
These and other insights are highlighted in a national online survey of 1,514
U.S. homebuyers that was equally distributed between baby boomers (born between
1946-1964), Generation X (born between 1965-1978) and Generation Y (born between
1979-1994) consumers. The study was conducted by International Communications
Research (ICR) on behalf of Century 21 Real Estate LLC, the franchisor of the
world’s largest residential real estate sales organization. The intent of the
study was to understand and compare the experiences of the first-home purchase
among members of three different generations.
"The CENTURY 21 System is prepared to address the real estate needs of consumers
throughout the many stages of homeownership, starting with their first home
purchase," said Tom Kunz, president and CEO, Century 21 Real Estate LLC. "As the
most recognized name in residential real estate, it is our responsibility to
understand and deliver on the unique needs and additional care many first-time
homebuyers require, whatever age they are."
The CENTURY 21 Homebuyer Survey asked the three generational groups questions to
discern some of the factors that influence the first-time homebuying experience.
Demographics
Today’s Generation Y first-time homebuyers are younger than their Generation X
and baby boomer counterparts. The average age for first-time homebuyers was 26
among Generation Y respondents, which is three years younger than Generation X
(29) and baby boomer (29) survey participants.
Of the survey respondents, the average boomer polled was 51 years old, followed
by Generation X and Y at 34 and 25 years old, respectively. Among those polled,
72 percent of Generation Y respondents were single women, followed by 56 percent
of Generation X’ers and 59 percent of baby boomers. Finally, 25 percent of Gen
X’s surveyed are single/never married, compared to only 5% of baby boomers.
Reasons for Buying
Baby boomers were more likely to have purchased a first home based on a life
event, including marriage or birth of a child. Their counterparts, Generation X
and Y buyers, tend to purchase a first home based on its appreciation value.
"Safe investment" is a key driver among Generation X (42 percent of survey
respondents) and Generation Y (39 percent) versus 35 percent of baby boomers who
are more likely to invest in a first home for "family reasons."
Generation X and Generation Y buyers tend to spend more for their first home
than baby boomers and this represents a larger portion of their household income.
On average, the impact on the household income was 21 percent of boomers’ income
as compared to 25 percent of Generation X and Generation Y’s household income.
Baby boomers identify price as a key concern when purchasing (51 percent) as
compared to Generation X (42 percent) and Generation Y (39 percent). Generation
X (8 percent) and Y (10 percent) buyers are more concerned with proximity to
work for their first home as compared to boomers (4 percent).
Primary Method of Shopping for Information
A majority of baby boomers (53 percent) ranked real estate brokers/agents as
their primary source for shopping for information on their first home, followed
by 45 percent of Generation X and 34 percent of Generation Y buyers. Generation
Y homebuyers (42 percent) search the Internet far more than their Generation X
counterparts (26 percent).
Forty (40) percent of all survey respondents noted that the best way to find a
broker/agent was through friends and relatives. Next, the Internet is to
Generation X and Y (21 percent each) what drive-by yard signage was to baby
boomers (17%) in finding a broker/agent for a first home.
In all three groups of buyers, the majority preferred more frequent contact from
their broker/agent when buying a first home (more than 50 percent want contact
every few days).
Length of Time to Purchase Home
While Generation Y respondents ranked the Internet as their primary source of
home shopping information, it took them longer on average to purchase their
first home. Baby boomers were the quickest first time home shoppers polled,
averaging 4.3 months to buy their first home, followed by Generation X at 4.6
months and Generation Y at 5.4 months.
Length of Stay
Baby boomers (26 percent) are more likely to stay in their first home for more
than 10 years as compared to Generation X (13 percent) and Generation Y (9
percent).
Today’s youngest homebuyers are more likely to live with family to save money
than other groups. Of those polled, more Generation Y buyers (22%) live with
parents or in-laws prior to purchasing their first home as compared to baby
boomers (3%) and Generation X (7%).
Dream Home
Not surprisingly, with empty nesters retiring into smaller homes, fewer baby
boomers (11 percent) think size is important in a dream home. More Generation X
(17 percent) and Generation Y (19 percent) buyers’ ideal homes are over 5,000 sq.
ft. The average size of a dream house for boomers is the smallest at 3,340 sq.
ft., with Generation X at 3,840 sq. ft. and Generation Y at 3,810 sq. ft. In
reality, the average size of a first home is only 1546 sq. ft., according to the
2005 National Association of REALTORS(R) profile of home buyers and sellers.
More baby boomers (33 percent) cite the Southeast as the dream home location
versus Generation X (27 percent) and Generation Y (25 percent). Today’s younger
buyers are attracted to the Northeast as the location for their dream home.
Twenty-two (22) percent of Generation Y and 18 percent of Generation X buyers
prefer this region over boomers (9 percent).
The Southeast and Southwest are the two favorite regions for a second/vacation
home for all groups of homebuyers surveyed. The Northeast is favored by
Generation Y buyers (14 percent) ahead of boomers (9 percent) and Generation X
(11 percent).
The CENTURY 21 System provides consumers interested in making their first home
purchase with a variety of online tools, including a first-time homebuyer guide,
available in English and Spanish on http://www.century21.com/ and
http://www.century21espanol.com/.
Survey Methodology
International Communications Research (ICR) of Philadelphia conducted a national
study of U.S. first-time homebuyers, including first-time buyers in their first
year of homeownership along with active first-time home shoppers, between March
17 and March 31, 2006. A total of 1,514 respondents completed an online survey
via the ICR web site as a result of an e-mail invitation. The study was
commissioned by Century 21 Real Estate LLC.
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