By Victor Normand
Published: March 2014
Before Tom Brokaw wrote about the “Greatest Generation,” that generation was also known as the “Silent Generation,” a description popularized by Time magazine for those born after 1925 who lived through the Great Depression and came of age during World War II. They were preceded by the “Veterans” who were born after 1900 and followed by the most famous generation of them all- the “Baby Boomers.” After coming up with that title, we got lazy as a society and began naming generations with just letters, X and Y, though the Y’s are now becoming known as “Millennials.”
There are specific benchmarks for the start and end of some of these generations, like world wars or sudden spikes in births. Although exact dates sometimes float around, they still tend to be in roughly twenty year increments. As for their usefulness, they often seem to have more significance after those within a given generation have had a chance to demonstrate behaviors. Predicting how a demographic segment of the population will act is an inexact science. That’s why it is wise to call them trends, which are easy to alter to conform to real time events.
(For other towns or Census facts visit the US Census website.)
So, here are some recent trends:
- Not surprisingly, Generation X is the largest group of home buyers as you would expect that age group to be, though they too were affected by the Great Recession.
- The age of the home purchased increases as the age of the home buyer decreases. The dominant preference for newer homes spans all age groups, but younger buyers are more likely to have to make more sacrifices to get that first home.
- There is a trend among younger buyers toward more urban properties and away from the suburban locations popular with their parents. While some of the reasons relate to life style choices, two others factors may be in play as well:
- Generation X and older Millennials are having children later so choices involving open space and schools can be postponed
- In many communities near urban centers, suburban home sites are less readily available and more costly to build on, making urban locations with favorable zoning and in-place utility infrastructure more attractive.
- Among Millennials, 65 percent are renters and 22 percent live with parents. Although their numbers rival that of the Baby Boomers, their activity in the housing market has yet to be felt for several reasons:
- The economy has yet to produce sufficient job growth which affects this group more than any other
- Student debt is a significant drag of finances for this age bracket
- Condominiums, often the first purchase for first time home buyers, have become difficult to finance
- Many older Baby Boomers are still stuck in homes with mortgages that exceed the value of the property and are unable to downsize as they had once planned.
Despite the challenges still facing many in the housing market, the economy is clearly moving in the right direction and the value of home ownership has not lost its appeal. The trend toward renting instead of buying that was strongest during the years immediately after the Great Recession has abated. So, while events shape history and the generations seem to behave in new ways, most of the underlying fundamentals of the housing market don’t really change.