From Realtor.com 1/27/16
Those who love babbling on about millennials’ narcissism, sense of entitlement, or ungodly love of selfie sticks are missing out on the big picture: These are the people forever transforming the world of home ownership.
Older millennials, in fact, are now the biggest group of first-time buyers. It’s a brave, new world! If you’re part of it and thinking about buying your own place, you might naturally turn to Mom and/or Dad for advice. Good call. But be aware that things have changed quite a bit since they bought their first home—you know, the one you grew up in, stealthily sneaked into at 2 a.m. as a teen, and finally escaped as an honest-to-God adult.
But exactly how much have things changed, really? To find out, we decided to compare the home-buying and ownership experience today with back when your parents bought their first place in the ’80s—a time when twee floral patterns were all the rage, “Sesame Street” was still on free TV, and Apple’s best-known product was … applesauce.
Let’s jump into the realtor.com® DeLorean and go Back to the Real Estate Future: 1985 versus 2015. Buckle up!
Fact 1: Millennials rule, but more buyers are older
Compared to the good (?) old days, Americans are delaying homeownership, just as they are delaying marriage. Sure, older millennials may be making their impact felt on first-time home buying, but the overall age of homeownership is steadily rising. The median age of home buyers was 33 in 1985, and now it’s 44, according to the National Association of Realtors®. Having a more mature career salary also helps in buying a home at today’s prices.
Fact 2: It’s not just Mr. and Mrs. Smith
Three decades ago, the home-buying club was almost exclusively married couples, who made up 81% of all owners. Now that number has declined to 67%; single females (15%), single males (9%), and unmarried couples (7%) are steadily on the rise.
Fact 3: Prices keep going up and up and up
Home prices have been steadily increasing, much to buyers’ dismay. Your parents probably paid around $80,000 for your childhood home in 1985; you’re facing about 1.75 times that price. NAR data show that the median sale price of existing homes was $222,400 in 2015.
Over the same time frame, household income increased 127% from $23,618 in 1985 to $53,657 in 2014 (the latest data available), according to the U.S. Census Bureau.
That combination of factors has led to low homeownership rates. In the third quarter of 2015, the Census Bureau reported that the homeownership rate, not seasonally adjusted, hit 63.7%—the lowest level since 1989. Stringent mortgage standards are another hurdle for would-be home buyers, says our chief economist, Jonathan Smoke.
Fact 4: Bigger homes, more bathrooms
In 1985, a typical home purchased was 1,610 square feet. That number has grown to 1,900 in 2015, according to NAR. At the same time, American families are shrinking, from 2.69 people per household to 2.54. (What does a 2.54-person household look like? We’ll save that for a future article.)
How do people make use of that extra space? More bathrooms, mostly. Say goodbye to the days when the whole family crammed into one tiny loo in the morning. Most for-sale homes on the market now have two bathrooms, and newly constructed homes are usually built with more than three bathrooms, according to the NAR and the Census Bureau. This is a positive development.
Fact 5: Luxe features are more plentiful, and disco is dead
The standard of living has improved over the years. Central air conditioning and dishwashers—things you can hardly picture your home, much less your life, without—only made it into half of households 30 years ago, reveals the American Housing Survey.
Aesthetics have also shifted. The ’80s taste for mauve is now a turnoff for home buyers, as are brass, track lights, and Laura Ashley floral comforters. And, perhaps saddest of all, disco-influenced decor has gone the way of … disco.