In the discourse surrounding real estate, conversations often revolve around baby boomers, Millennials, and Gen Z. Yet, tucked away in the shadows, Generation X plays a critical, albeit frequently overlooked, role.
Demographic Impact and Homeownership Trends
Born between 1965 and 1982, Generation X occupies a unique space as the smallest demographic cohort.
Nevertheless, they exert significant influence in the housing market.
Often referred to as the “sandwich generation,” Gen Xers find themselves balancing the needs of both aging parents and their adult children.
This dual responsibility is shifting their housing aspirations and purchasing tactics as they navigate today’s evolving marketplace.
Recent findings from the National Association of Realtors® reveal that—despite making up just 19% of the U.S. population—Gen Xers account for 24% of recent homebuyers.
This statistic highlights their impactful presence in the real estate sector.
Notably, around 60% of Gen X individuals are homeowners, many of whom have seen their property values soar over the years.
A global real estate advisor points out that those who purchased their homes before the coronavirus pandemic have enjoyed remarkable increases in property values.
This surge means that seasoned homeowners can leverage their equity to trade up for larger, more expensive houses, even amidst tough market conditions.
Financial Responsibilities and Housing Choices
As of 2023, Generation X stands as the second highest-earning demographic, boasting an average income of $126,900.
Their professional journeys have evolved significantly over time, with many moving from entry-level roles into leadership positions.
This career growth has enabled them to seek larger homes, averaging around 1,940 square feet—the second largest among all generations.
However, the road to homeownership isn’t without its hurdles.
On average, Gen Xers carry more debt than their peers, grappling with student loans that amount to about $45,557 as well as mortgage balances nearing $278,935.
Many in this generation took advantage of historically low mortgage rates—around 4%—during the 2000s and early 2010s.
While this has been beneficial in many ways, it now poses a dilemma; with interest rates close to 7%, many Gen X homeowners hesitate to sell their lower-rate mortgages, even if personal circumstances call for a change.
The complexities of being a sandwich generation member add further layers to their housing decisions.
A study from the Pew Research Center found that over half of Gen Xers provide financial support to either their parents or children, which often limits their ability to move or upgrade their living spaces.
A survey by Realtor.com® echoes this, revealing that 30% of Gen X respondents feel that their responsibility to family members has hindered their ability to either purchase new homes or pay off existing mortgages.
This trend has contributed to the rise of multigenerational households, which currently encompass about 60 million Americans—a dramatic increase over the past fifty years.
Interestingly, 19% of Gen X homebuyers are explicitly searching for properties that can accommodate multiple generations.
Future Housing Needs and Market Strategies
Homes that cater to multigenerational living typically feature separate entrances, soundproofing, or accessibility amenities—creating independent living spaces for each generation.
Remarkably, 30% of Gen X homeowners report receiving financial help from family members to purchase their homes.
The rising costs of real estate and challenging job market conditions are among the reasons many young adults return to live with their parents, while older generations prefer being near family.
As they approach their 60s, Gen Xers grapple with decisions about moving, upgrading, or staying put.
With significant equity accumulated in their properties, they find themselves well-positioned should they choose to tap into that wealth.
Some Gen Xers are eyeing larger homes to accommodate growing families, while others weigh the benefits of downsizing as they prepare for retirement.
A significant portion of this generation is also considering how their future housing needs might include space for aging parents or adult children.
A local real estate broker mentions that many Gen Xers still show a keen interest in larger homes, potentially due to having postponed moves caused by financial constraints or child-rearing responsibilities.
This cohort is inclined to select spacious properties, stick around in their chosen neighborhoods for longer periods, and seek out unique homes in desirable locales.
For those on the fence about entering the housing market, the broker advises that there’s rarely a perfect moment to buy.
Waiting for lower interest rates may lead to stiffer competition and rising prices.
If being closer to family or downsizing aligns with their current needs, then the time is right to make a decision.
Source: Realtor.com