Generation X Is Getting Serious About Homeownership
In the perennial grunge ballad “Serve the Servants” Nirvana front man Kurt Cobain croons, “Teenage angst has paid off well / Now I’m old and bored.” This might be the unlikely new reality for those of Generation X, a term meant to define those born between the late 1960s to the mid-1970s, who have become a powerful homebuying and selling group.
Two decades after the demographic-defining grunge music explosion, the Gen X crowd has (for the most part) outgrown their iconic predilections for tattered flannel and irony and traded these in for a serious interest in the housing market.
A Force to be Reckoned With
While they might not get as much attention as the Millennial generation, Gen X has a surprisingly robust buying power. According to Pew Research Center tabulations of the U.S. Census Bureau population projections in 2014, those in the Gen X generation — ages 35 to 50 in 2015 — are projected to outnumber the Baby Boomer generation by 2028. With that comes a marked uptick in homebuying and selling behaviors.
According to the 2015 Home Buyers & Sellers Generational Trends report from The National Association of Realtors® (NAR), Gen Xers represent 27 percent of homebuyers and 27 percent of home sellers — and 29 percent of Gen Xers had bought their first ever home.
Yet, Gen X is ahead of Millennials when it comes to being underwater on their mortgage. According to Zillow’s Real Estate Research, 18.7 percent of Gen Xers were underwater on their mortgage as of August 2014, compared to 19.6 percent of Millennials. While this may be grim evidence, it also shows that Gen Xers are recovering steadily from the housing crisis that plagued the generation just a few years ago.
It wasn’t too long ago that Gen X suffered the biggest brunt of the housing crisis. After all, Gen X was the demographic that held the largest percentage of household foreclosures, making up more than 1 in 10 of all foreclosures in 2008.
But that’s all changing. NAR’s research found that Gen X is now the largest recent home-selling demographic, at 27 percent, followed closely by the older and younger Boomer generations (at 23 percent and 20 percent, respectively).
Gen X homeowner Nick DiMinno, 42, owner of Sip Fine Wine in Park Slope, Brooklyn, is emblematic of a new stability among homeowners in his demographic. “It was a totally good investment,” DiMinno says of his Columbia Water District (Brooklyn, NY) home purchase. “We’ve never struggled to pay the mortgage. It wasn’t over our price range, and we’ve watched the value go up by around 40 percent.”
DiMinno bought his home at the height of the housing market in 2007. “It’s definitely worth a lot more now than what we paid for it. We never thought it would be, but that’s turned out to be the case,” he says.
When it comes to buying, the NAR study found promising insights about Gen X: the average buyer in this demographic was 41 years old, making a median income of $104,600, and looking for a home that’s 1,890-square-foot and priced at $250,000.
Additionally, Gen Xers aren’t just looking for homes of equal size and value — they’re looking for larger homes to accommodate growing families. The NAR study found that 13 percent of homebuying Gen Xers purchased a multi-generational home.
The Allure of Stability
The study revealed many emerging trends for Gen X homebuyers — like environmental conscientiousness (36 percent consider commuting costs “very important”) and they’re the largest age group to purchase detached, single-family homes, at 85 percent. Gen Xers are also the most likely to utilize open houses as a means for home purchasing.
“I’m a pain…in terms of looking for an apartment,” DiMinno says. “I need to have an apartment that has a nice kitchen, nice bathrooms, and nice finishes. We weren’t really looking for a fixer-upper. It was just ready to move in with a great view, and it’s an elevator building with two bedrooms and two bathrooms. You can see Manhattan perfectly, but we have our quiet neighborhood. It’s the best of both worlds,” he says. And he isn’t the only wise and discerning Gen X homeowner on the block.
NAR’s study also reports that while many cite Millennials as the go-to demographic for power buying and selling in the housing market, Gen X is a surprisingly stable and powerful group that shouldn’t be overlooked or underestimated. Despite the housing troubles faced in 2008, Gen Xers are making more money and purchasing homes. In doing so, they are establishing themselves as a compelling, must-watch group for those who follow the housing market.