In conversations about American generations, Gen X is often last in line. The baby boomers have clearly had a dominant impact on the nation’s evolution. And today, the focus is on the effect the millennials will have on housing and the economy.
But from a new-home construction perspective, it is Generation X—those born from 1965 to 1980—who will shape the fortunes of the home building sector. Yes, there are fewer of us, relative to the boomers and Gen Y. There are roughly 79 million Americans in Generation X, compared with about 80 million boomers and 88 million millennials.
However, members of Gen X are increasingly the typical buyers of newly built single-family homes. For homes built from 2010 to 2015, approximately four out of 10 were purchased by a member of Generation X. And this share will rise in the coming years.
That’s not to say there are not challenges. Generation X was particularly hard hit by the housing crisis and the Great Recession. For example, the homeownership rate for those aged 35 to 49 fell from above 71% in 2004 to below 62% today. In fact, this places the homeownership rate for Gen X below the overall rate of homeownership for the nation.
But the demographic factors are promising. First, Gen X households are larger and more likely to have children, 1.1 on average. And their households overall are larger, with 3.1 total individuals on average, compared with a 2.4 household member count for the nation as a whole.
Gen X is also approaching the peak of its earning years. For households reporting income (that is, excluding households reporting no income), the median household income of Gen X now stands above $93,000, while it’s just under $80,000 for the overall population.
Larger household size and higher income are all factors that will support and grow new-home construction over the near term.
With respect to preferences, Generation X wants what prior generations have wanted when it comes to housing. Using the NAHB Consumer Preference Survey of recent home buyers, those born from 1965 to 1979 reported preferences for single-family detached (72%), suburban locations (65%), and amenities that new construction can provide, including Energy Star–rated windows (86%) and walk-in pantries (81%). New construction clearly possesses competitive advantages for these kinds of buyers.
So while the focus of demographic discussions is on Generation Y, let’s not forget the positive economic impact Generation X will have on the home building industry over the next few years.
