Did you know that Millennials actually make up a considerable part of the economy? Their economic strength as a group seems to be growing every day. As of 2019, Millennials are making up approximately 37 percent of home buyers… even more than the Baby Boomers! So what exactly are these Millennials buying, and what trends are growing along with their increasing representation in the market? Let’s find out.
First-Time Buyers – About 52 percent of Millennials who are buying homes are first-time home buyers. This makes sense for younger Millennials, but even older Millennials who were born in the 80s are also first-time buyers. Before buying, a large number of these Millennials were renting homes. By buying homes, they can enjoy the benefits of ownership and build equity for similar amounts (or in some cases, less) than they were paying each month in rent previously.
Family Homes -The majority of home-buying Millennials are buying single-family homes. This is in part because over 50 percent of them are either married or in long-term relationships. This is interesting – in 2018 there were more married couples among home-buying Millennials than there were in any other generational group that was in the market for a house. A significant number of Millennials also have children under the age of 18 living at home, which increases the need for a family-friendly home.
Motivation to Buy – The majority of Millennials who have bought homes within the last year did so simply because they wanted to own a home of their own – and stop paying rent . Some wanted to own a larger home, be closer to friends and family or were moving due to job relocation, but the general desire to own a home was listed as a reason for buying. A lot of this came down to the opportunities that were presented; over 50 percent of Millennials report that it was “just the right time” to buy a home, while the second most common reason (that they didn’t have much choice and had to buy when they did) was only reported by around 10 to 15 percent of Millennials.
Back to the Suburbs – One big trend among Millennial home buyers is that they were buying homes in the suburbs. This wasn’t restricted only to Millennials; 51 percent of all homes purchased in 2018 were located in suburban areas or subdivisions. The Millennials fell pretty close to this statistic, with small towns being the second most common location. The majority of the homes Millennials purchased were previously owned. The Millennials as a group are not moving into newly built subdivisions.
Biggest Factors – There are a number of factors that affected the purchasing decisions of Millennials. The presence of public transit or proximity to work was one major factor, with many Millennials trying to minimize commuting costs. Heating and cooling efficiency also played an important role. In general, Millennials were more willing to compromise on price than on a home’s condition, but only around 20 percent were willing to compromise on the distance of their new home from work.
Home Shopping Trends – By far, the majority of Millennials started their home search by looking online to try and find properties for sale. Around 15 percent spent even more time online than that, starting their search by researching the ins and outs of the home buying process before even starting to look at properties. Beyond online sources, Millennials trusted real estate agents the most for information about homes for sale.
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Choose to have an amazing day….Jeff