Young, Affluent Homebuyers Drive Housing Market Amid High Mortgage Rates

While high mortgage rates have pushed many buyers and sellers out of the market, a new study from Morning Consult finds that affluent Millennials and Gen Z adults have driven the housing market. The study revealed that wealthy individuals from these generations made up approximately 66% of buyers between late May and late August, while Baby Boomers and Gen Xers, who are more likely to already own homes, are largely staying out of the market.

Claire Tassin, an analyst at Morning Consult and the author of the report, said that young adults with upward mobility and life changes, such as starting a new job or having a child in the past year, were more active in the housing market this summer. This group also fits the profile of social strivers, luxury goods consumers, and those willing to invest significantly in home renovations, appliances, and technology.

“There’s also an indicator of a privileged lifestyle within this group: homebuyers are less likely than others to choose less expensive options, believe in equal treatment for all, or prefer doing things themselves,” Tassin noted in the report. “The psychographic profile of recent homebuyers reveals a desire for outward signifiers of status.”

Morning Consult’s findings come just weeks after the National Association of Realtors reported a national decline in existing home sales for August, despite a 150-basis-point drop in the 30-year mortgage rate by mid-September. Existing home sales fell 4.2% year-over-year to 3.86 million in August, while the median sale price increased 3.1% to $416,700, marking the 14th consecutive month of price increases.

Although home sales have weakened in the last year, the recent drop in interest rates could pave the way for lower mortgage costs and set the stage for a potential rebound in the housing market as borrowing conditions improve and enable a broader demographic to buy homes.