Home Ownership Trends in 2019, By Age and Income

by Amanda WoolleyMarch 19, 2019

Taking the plunge into homeownership can be daunting, especially for first-time buyers. There are seemingly endless options when it comes to selecting where to live, what type of home to buy, and understanding all the money-related facets to home buying. Housing market trends are constantly changing due to price and preference fluctuations, such as home design popularity and neighborhood values rising and falling.

As these trends change, they impact home buying among all generations and income levels. The ways we approach homeownership vary from person to person. Online home improvement network Porch recently conducted a study to identify what these home buying trends actually look like.

Explore the results below and compare how your home buying experience relates or is different from those across generations and among differing home values.

How much do we put down on our homes?

Purchasing a house involves way more than signing your name and being handed the keys. Beyond the surface-level actions of viewing homes and making decisions lies a world of contracts, agreements, approvals, estimates, inspections, and more. One of the first major decisions someone faces when buying a home is determining how much money they can commit to on a down payment. Among those surveyed, the majority were able to contribute between 0-10% of their total home cost on a down payment.

Financing a down payment can come from a variety of sources but the top two methods among survey respondents were self-funding their down payment or using their income from a previous home to put down on their new home.

Age and household values: who is paying the most?

 

Financial stability is less and less of a possibility for many Americans, with the ideal home being defined more by someone’s means and less by their desires. With the exception of notoriously inflated housing market prices in large cities such as San Francisco and Seattle, many experts recommend that a home’s value should not exceed 2.5 times a person’s annual income. This data indicates that most fall within those parameters, but many of those surveyed are feeling the brunt of historically housing prices and steadily rising costs across the board.

Overall, home values appear cap out at around $300,000 for about 90% of respondents under the age of 25. In fact, younger generations appear to have a more concentrated range in housing prices. This could be due to younger members of the workforce who are more likely to be saving for the first home. Starter homes typically have lower home values than a second or third home, as they represent a stepping-stone for first-time buyers just entering into the role of a homeowner.

Income, related to home ownership and home buying

When comparing household incomes to home values among age groups, the data implies that this relationship looks like a curve—the youngest and oldest respondents making less money than those between 25-64 years old. The outlier age groups are either entering salaries roles for the first time or they are retired and sustain themselves on a fixed income. Generations in the middle are more likely to earn more and their income levels are more evenly distributed, with between 25-35% of people ages 25-64 earning over $120,000.

An observable rise in housing costs is expected to continue, specifically in desirable cities and metropolitan areas. As a result, many residents are being priced out of the neighborhoods they have lived in for generations. With the development of new condos and luxury housing on the rise, there is a looming crisis that will need to be addressed by these city officials to find a balance between attracting new real estate investments and protecting the local residents within their growing cities.

Find the houses you’re looking for at Homes.com

As younger generations enter the workforce, they will be the next in line to take the plunge into home ownership. Knowing more about the ins and outs of the housing market can help equip these future-first-time-buyers with the right tools to make the decision that is best for their goals. At Homes.com, you can search for properties in your desired area to see what appeals to you and begin making the first steps to thinking about buying a home. Being prepared is the first step, so head over to our Simply Smarter Home Search to begin the process early.

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About The Author
Amanda Woolley
Amanda Woolley heads up public relations and communications at Porch, a leading home repair marketplace. Porch helps homeowners make home maintenance and repair easy by connecting them with the right professional to get the job done.

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