THE PROBLEM WITH GENERATIONS AS HOME BUYER DEMOGRAPHICS

THE PROBLEM WITH GENERATIONS AS HOME BUYER DEMOGRAPHICS

Despite their widespread use, millennial, baby boomer, and Gen-X classifications fall short for many analysts and professionals.

As common as it is to use generation groups as predictors of buying behavior or other activities, many analysts and industry professionals are critical of the approach for a number of reasons.

Unlike birth years, ages, and income levels, generation classifications are not hard data. Many research studies that classify Americans by their generation group establish exact date ranges for each group, and the U.S. Census fixes the post-war “baby boom” phenomenon between 1946 and 1964. But neither Millennials nor Generation X have a starting or ending date that is widely agreed upon, and the reasons for those starting and ending date ranges can be unclear.

“Generational boundaries are fuzzy, arbitrary and culture-driven,” says Paul Taylor, senior fellow and former executive vice president of the Pew Research Center, in “Generation X: America’s Neglected Middle Child.”

The date ranges covered by the generation groups are also very large – too large, according to Thrive Home Builders’ Stephen Myers, to determine anything specific about the group they cover. This makes it difficult for builders to know exactly what a certain type of demographic will want in a new home.

“Generation groups are almost like a horoscope except that they are for people born within 20 years,” says Myers. “There’s pretty much no generalities to be made about a 20-year group of people.”

This holds especially true for Generation X home buyers, as the current age range of this group–mid-thirties to early fifties–spans almost every segment of the new home market, according to Myers. “Gen X is a huge number. I’ve seen everything from people born from as early as 1961 or perhaps 1964 or 1965, all the way up to ‘81 or even ‘84 by some definitions,” he says. “Some of the buyers on the early end of Gen X may be looking at move-down type product where their kids have left the nest and they’re looking at the next phase of their life. And if you go as far as 1984, you may be talking to people who are buying their homes for the first time.”