Understanding the demographics of a country would give you a very good idea about the direction of its property market. If you are interested in selling your overseas property in the USA, you are likely to find this article interesting. Here, we look at the U.S. property market from the perspective of Baby Boomers, Millennials and Gen Xers.
Baby Boomers and the US property market
Baby Boomers were so far the biggest generation in the U.S. in terms of population. But they have since been overtaken by their children – the Millennials. Baby Boomers are those who were born between 1946 and 1964 – which makes them between 52 and 70 years old today.
The Baby Boomer population has been shrinking in the USA – they number 74 million today, and are expected to decline to just 16 million over the next 30 years.
Most people expected Baby Boomers to sell their homes and to move to states like Florida and California. But that hasn’t happened as much as one would have thought because the recession of 2008 made many Baby Boomers postpone their retirement.
Many still had their adult children living with them because of how difficult it for young people to get jobs in the state that the economy was in. Indeed, 1/3rd of Baby Boomers in the USA have their children still with them, and for this reason most are reluctant to sell their family homes, downsize and move to a smaller retirement home in the Sunbelt.
Gen Xers and the US property market
Gen Xers or those between the ages of 35 to 50 are the generation that is in the prime of their lives. They are generally wealthy, with a high employment rate and have a home of their own. Most Gen Xers have families and have their children living with them. They were hit by the economic recession of 2008 much like everyone else, but have recovered much faster as well, and most have gotten back on their feet with the fast improving economy. The Gen Xers number 65 million and they are expected to be both home sellers and home buyers.
Millennials and the US property market
Millennials, or those in the age group of 18 to 34, have finally overtaken Baby Boomers and become the most populous demographic in the United States at 76 million. The media talks a lot about the Millennials fuelling a boom in the property market in the country, but it’s fair to say that the job market hasn’t been too kind to them over the last few years.
The Millennials had a tough time finding employment, and until recently, there was a huge difference between the employment rates of Millennials compared to the general population, with Millennials faring a lot worse. This has changed since 2014 as more Millennials are finding jobs in the improving economy.
So this means Millennials are finally making money and are moving out of Mom and Dad’s house. If the trend continues, over two-third of home purchases over the next 5 years in the United States will be done by them.
But it’s easier said than done because most Millennials would rather rent a home than buy one. Renting is very popular with young people today as they don’t like being tied down to a particular place. There’s a problem with student loans to deal with as well – unpaid student loans in the U.S. are worth over $1 trillion today.
But Millennials are very well educated in general and technologically savvy too. So they can be expected to settle down in a few years. Millennials prefer to buy small-sized, eco-friendly, low maintenance, affordable and energy efficient homes that are not far from where they work.