Generation X is that portion of the population born after that of the baby boomers (that generation born between 1946 and 1964); roughly born from the early 1960s to mid-1970s and perceived to be disaffected and directionless. Being both a baby boomer AND a Generation X, I could easily take offense to such a characterization. I am far from disaffected and directionless.
The National Association of Realtors reported in the 2016 Home Buyer and Seller Generational Trends report that the typical buyer was 44 years old (Generation X; I may find myself at the other end of it) and at 35 percent, buyers 35 years and younger continue to be the largest generational group of homebuyers with a median of 30 years old (Generation Y). That tells me that it is possible that at least 35 percent of this population has direction.
So why are these generations choosing buying over renting? According to that same report by the National Association of Realtors, it is to fulfill the American Dream; the desire to own a home of their own. I submit to you that in the current market, there are many other things to consider.
With the rental vacancy rate at a low causing higher rents, these generations in particular are seeing the upside to owning their own. In many cases, because of inflated rental rates, home ownership can be more affordable. These generations are known to be the more techy of our society and can consider innovative ways to increase energy efficiency and/or simply “smarten” up their own space. Buying allows the Buyer to choose a space suitable for their needs rather than settling on and fitting into a space. By owning, you belong there and do not have to worry about the unexpected termination or the threat of increased rent. There is the obvious tax deduction of course; however, one reason very attractive to these generations is the potential income stream.
With the largest generational group of homebuyers being 35 years old and younger and especially those in that age group not yet having started a family, I have had several buyers in this generation buy a home and turn around and rent a room or portion of their home out as an income stream. Additionally, they plan to use their current home to leverage themselves to buy something else down the line that will fit their growing needs perhaps selling to do so or retaining as rental income property.
Admittedly, buying is not for everyone, but with the current rental situation and interest rates still darn impressive, it sure is food for thought for any generation.