Born between 1965 and 1982, Generation X is the smallest demographic group, but has been quite prominent in the real estate market. According to the National Association of Realtors (NAR), Generation X accounts for 24% of the home buying market share, and about 60% of Generation Xers own properties, many of which have high values.
Home Buying Characteristics
Generation X is the second highest earning generation with an average annual income of $126,900 in 2023. They have accumulated wealth through years of career advancement and are able to purchase larger homes, averaging 1,940 square feet. However, they were also burdened with significant debt, including $45,557 in student loans and $278,935 in mortgages.
Despite this, many locked into lower mortgage rates in the early 2010s (averaging 4%), but today rates have risen to around 7%, causing many to “lock in” to their current properties and not trade up.
Financial Pressure and the Home Buying Dilemma
Generation Xers are not only responsible for their own mortgages, but also for providing financial support to their aging parents and adult children. According to the Pew Research Center, 54% of Gen Xers provide financial assistance to family members, making it difficult for them to move or pay off their mortgage. This economic pressure is reflected in the rise of multigenerational households, with approximately 60 million Americans now living in multigenerational households.
Faced with a choice: Stay put, upgrade or downsize?
As Gen Xers enter retirement, many are considering whether to upgrade or downsize their homes to reduce expenses. While some are still looking for a larger home to accommodate multi-generational households, many others are leaning toward downsizing their homes in preparation for retirement.
An important issue facing Gen Xers in this process is market timing, says Angie Golembiewski, an agent with Baird and Warner, who advises homebuyers not to wait for the “perfect time” to buy a home, even though many Gen Xers are still looking for a larger home, because changes in interest rates could push up prices. Changes in interest rates in the market could push prices higher.
