SharePerhaps the heavens have not shifted, nor have the planets realigned—but a seismic and historic shift is happening in the United States. Housing, our most basic need and home base for everything we do and seek in life, is being defined in new ways by new generations.
How we keep up with demand and trends—and create places where multiple generations can thrive together—will help define how and where we live through the rest of the 21st century.
For the 10th time in 11 years, millennials (ages 25 to 43) are the biggest generation of homebuyers. In other words, the folks who were “just kids” to the baby boomers (ages 59 to 77) and Silent Generation (ages 78-98) are the trendsetters in what America wants in terms of housing.
At the same time, the U.S. Census forecasts that by 2034 there will be more people 65 years and older than under the age of 18 for the first time in history. America is rapidly aging and that means boomers and the Silent Generation are looking for housing that allows them to age in place. That means millennials may be looking for a room within their home—or an accessory dwelling unit (ADU)—to house their boomer or Silent Generation elder family members.
The 2024 NATIONAL ASSOCIATION OF REALTORS® (NAR) “Home Buyers and Sellers Generational Trends” report, which examines the similarities and differences among recent homebuyers and sellers across generations, found that while millennials make up 38 percent of the homebuying market, baby boomers still play a significant role in the housing market, as they are 31 percent of the buyers and the largest home-seller generation—accounting for 45 percent of all sellers in the most recent NAR survey.
Despite the high cost of housing, Generation Z or Gen Z (ages 18 to 24) accounted for 3 percent of all buyers. Dr. Jessica Lautz, NAR deputy chief economist and vice president of research, noted this emerging group represents diversity and independence. Nearly a third of Gen Z purchasers (31 percent) were single females—a proportion significantly higher than in any other generation.
Even though NAR research has proven that the supply of housing is far below demand, the report “underscored a rise in first-time buyers across many generations, with 32 percent of all buyers purchasing for the first time, an increase from 26 percent last year.”
Far beyond numbers, our trends and demographics raise questions about where each generation wants to live and how they want to live.
- As America rapidly ages, are we building communities that allow people to age in place?
- Is the high cost and low inventory of housing—both for sale and for rent—putting the squeeze on all generations, especially Gen Z?
- Are builders delivering homes—both single-family and multifamily—that reflect what people in each generation want and need?
- Are there structural barricades to affordable and diverse housing?
- Is there some sweet spot of town planning and homebuilding that can create safe, healthy, amenity-rich communities that match the desires of multiple generations?
There certainly are no tidy, one-size-fits-all answers to these difficult questions. But a look at trends, research and best practices can paint a picture of where we are now and how we can strive to make places—both inside and outside the front door—that serve our housing needs with dignity, inclusion and flexibility.
NAR’s Lautz said the notable rise in younger homebuying is attributed to both younger (ages 25 to 33) millennials stepping into homeownership for the first time and older (ages 34 to 43) millennials transitioning to larger homes that suit their evolving needs.
“The big takeaway: that millennials as the biggest buyers is slightly counterintuitive because we know the struggles they have had with lack of stock, affordability and high cost,” she said. “As Gen Z sneaks into the housing market in single digits, they are more likely to be a single woman and more likely to identify as a LBGTQ+ buyer. As the desire to be a homeowner grows in Gen Z, we will see more diverse homebuyers.”
While many may assume that baby boomers sell their homes to downsize, reaping the cash equity of selling a large place to move to a smaller, less expensive home is not the top reason they are nearly half of home sellers.
“The No. 1 reason to move is to be closer to friends and family,” Lautz said. “As they enter retirement, they are relocating to be closer to their children and grandchildren. The housing equity they have allows them to put down a larger downpayment—or pay cash—and compete in today’s housing market. It gives them the flexibility to move to be closer to friends and family.”
Lautz said, the lack of housing volume and diverse types of housing within that lagging inventory is one of the biggest issues in the housing industry. “We need to be building more homes to meet the demands out there. Nearly a third of homes are selling for more than the asking price—there are bidding wars,” she said. “We must build affordable units; that is what’s most in demand.”
She said America has the highest percentage of child-free homes ever—70 percent. Her stats go back to 1985, when child-free homes were 58 percent of housing.
“A lot of people might want a small-square-foot property, single-family or multifamily, but we see a mismatch. We keep seeing larger homes, new and old, coming to market, because a larger home has the biggest profitability,” she said. “We need to look at bringing different types of units to market. We also have to consider a significant amount of people who are buying a home with the intent of having an elderly relative or young adult living in that home.”
Housing affordability has
become so difficult for so
many Americans.
A Chicago Association of REALTORS® homebuying trends analysis backs Lautz’s insights. It found that Gen Z homebuyers are purchasing the smallest homes at just under 1,500 square feet, and they are the generation most likely to own a home that’s not a detached single-family property.
Lautz said housing affordability has become so difficult for so many Americans, that she has seen a rise in co-housing and other ways of creating cost savings.
In greater Portland, Ore., the need for co-housing has grown as people are finding it harder to afford a house. They also are learning the benefits of clustered housing designed for positive cross-pollination between generations.
“Young people are finishing college, but staying home because they can’t afford housing. Elders are outliving their incomes—the fastest growing population of homeless people in Oregon is elders. Multigenerational living addresses those and other issues,” said Derenda Schubert, executive director of Bridge Meadows, defining “elders” as 65 and over.
Bridge Meadows has a trio of co-housing cluster options in urban and rural Oregon:
- An urban North Portland location with 36 total units with nine for families and the rest for elders.
- A suburban edition in Beaverton with 41 units—nine for families and 32 for elders.
- A rural setting in Redmond with 36 total units—10 for families and 26 for elders.
The Bridge Meadows communities are built with Universal Design—so residents can be independent and live with dignity whether they are toddlers or centenarians. The scale matches surrounding neighborhoods. Units for elders—one and two bedrooms—are intentionally scattered among the family-sized units.
“This is living with meaning and purpose. You are contributing to the world. Kids mingle with elders. People watch out for each other. Everyone feels safe. Isolation, a huge threat to mental and physical health for elders, is eliminated,” said Schubert.
A large community room hosts potlucks, knitting, art classes, tai chi, movies, birthday celebrations and more to connect people across age, race, sexual orientation, etc. Schubert is convinced that beyond the benefits of a close-knit community, economics of low wages and expensive housing will make co-housing a major trend.
Dozens of scholars have cited over-restrictive, land-use regulations as one of the culprits for the high cost of housing and the supply not keeping up with demand. About 75 percent of residential land in American cities is zoned solely for single-family detached homes. That excludes “missing middle” housing—duplexes, triplexes, fourplexes and small bungalows—used to provide a lot of affordable housing.
Interestingly, missing middle housing is rarely eligible for tax credits or most other federal, state or local government subsidies. Though some cities are changing rules, a lot of single-family zoning also outlaws ADUs—a residence that has a full kitchen and bathroom and is located on the same lot as a primary residence. ADUs can be attached or detached from the main residence, and they can be used as rental housing or to provide living space for family members or caregivers.
Inclusive housing, ADUs and livable communities are all needed to serve the more than three-fourths of adults 50 and older who want to remain in their homes for the long term. For more than a decade, the AARP “Home and Community Preferences” survey has shown 77 percent of those aged 50 and older want to age-in-place vs. retire to an all-seniors community.
Rodney Harrell is vice president, family, home and community at the AARP Public Policy Institute. NAR is collaborating with AARP on a Livability Index created by AARP to assist and engage people of all ages in making age-friendly decisions and purchases for the home.
“We are a nation of many people, many generations and many ages. But our housing stock isn’t,” Harrell said. “Studies show one percent of homes have all the features we need for aging.”
Inclusive housing, ADUs
and livable communities
are all needed.
AARP has crafted model missing middle and ADU legislation, so local jurisdictions can adopt those tools to better serve diverse housing needs. It also advocates for more walkable communities, which serve the roughly 30 percent of people—of all ages—who do not drive.
“A lot of what we built for decades, you have to drive to access everything. We must build homes where you can walk, bike or take transit to cultural centers, parks, shopping, education or jobs,” Harrell said, noting that while this helps older adults, it also is a huge benefit to people too young to drive as well as those with disabilities or incomes that prevent use of a car.
The CDC has documented that more than 50 million people in America are caregivers. Harrell said that large number makes it imperative to design inclusive housing that can make life healthier, safer and more productive for both the people needing care and the caregivers.
“People shop for the house itself. They don’t think of its location in terms of location or ability to age with the owner,” Harrell said. “Spouses pass on, people cannot maintain a large house, they can’t walk up the stairs. People are isolated, they don’t drive anymore so they can’t get to the store or even family. I’ve talked to many people whose dream home has become a nightmare.”
Harrell tells people to approach housing policy like a Swiss Army Knife—with lots of tools and flexibility. He said planners need to design communities that don’t just have multiple generations, but are designed for intergenerational interaction and the positive benefits it brings.
The Pew Research Center adds credence to the thought that housing and communities must become more age friendly while having more entry points for younger people rebuffed by the lack of affordable housing.
Pew reported that the number of Americans ages 100 and older is projected to more than quadruple over the next three decades, from an estimated 101,000 in 2024 to about 422,000 in 2054, according to census projections.
At the same time, Pew found that young adults in the United States are reaching key life milestones later than in the past. “Adults who are 21 are less likely than their predecessors four decades ago to have reached five frequently cited milestones of adulthood: having a full-time job, being financially independent, living on their own, getting married and having a child.”
Matthew Kaplan, Ph.D., is professor of Intergenerational Programs and Aging in the Department of Agricultural Economics, Sociology and Education at Pennsylvania State University. He co-authored, with Irv Katz, a longtime leader of nonprofits on a national scale, “Intergenerational Community Planning”—a deep dive research paper on aging trends and placemaking for the American Planning Association.
“A lot of planning is top to bottom. It doesn’t get at creativity and imagination,” Kaplan said of planning that becomes more focused on zoning code and regulations than how to create great places that are culturally rich. “Too many suburban and even some urban places are designed in a way that makes it hard for people to walk around and meet each other on the street.
We need to design in ways that are age friendly, family friendly—facilitating ways to interact.
“We need to design in ways that are age friendly, family friendly—facilitating ways to interact. Communities need an interactive element. We need places to know one another, have fun with one another—to help people get out of their social isolation bubbles.”
These kinds of places nourish a higher level of civic engagement so people can work from the ground up with government to address issues of housing types and affordability. The APA paper speaks to focusing on younger and older people in the planning process: “By focusing on engaging these two populations, as well as the generations in the middle, and crafting policies and plans that address their needs and bring them together, planners can make sure their communities are good places to grow up and grow old.”
Kaplan said old-fashioned planning—an evening meeting where people have two minutes to share their views by speaking into a microphone—does not create cohesive planning for an aging and increasingly diverse America. “Finding the magic sauce involves intentionally focusing on voices that spend the most time in the community,” he said, saying rigid night meetings can exclude a large part of a community. “Have walking tours. Come together to build a model and talk about what the people would like to see in their community. Go directly to stakeholders.”
