Who are Millennial Homebuyers?
Last week, we discussed why homeownership has been a cornerstone of the American Dream for decades. This week, we discuss how the next generation behind the Baby boomers is affecting the real estate market and how they’re learning to adjust to homeownership. Though millennials, often classified as those born between 1980 and 2000, are changing jobs more than ever, getting married later in life and graduating with more debt, Gen Y is still interested in taking part in the American dream of buying a home. We offer insight into the new demographic along with some advice for those millennials that may not be quite sure how to handle homeownership among the pressures of the recession.
What do millennials want in a house?
A Trulia consumer survey with millennials indicates that 68 percent of homebuyers are looking to buy a home under $200,000. In the past, many home buyers believed that “bigger was better,” however, with the current economy, millenials are seeking out more practical homes that fit within their budget and their lifestyle. A National Association of Realtors’ Home Buyer and Seller Generational Trends Report reported the typical first home purchase for a millennial is a 1,800-square-foot house costing $180,000 that they plan to stay in for 10 years. When it comes to environmentally friendly features, millennials put more emphasis on commuting costs than previous generations, though only a minority is likely to live in a city, according to the report.
Why are millennials buying homes?
Though the economy is working against millennials as student debt topples nearly $1 trillion (more than credit card and automobile debt), millennials are still remaining hopeful about buying homes. A Western Union poll found almost half of people aged 21-33 are planning to buy a home within the next five years. Young buyers are more likely to move for job relocation or wanting to upgrade to a larger living space. On the opposite end of the spectrum, unsurprisingly, older generations are looking for a smaller home or want to be closer to family and friends.
So what’s holding millennials back?
The NAR report revealed 56 percent of respondents cited student loan debt as the biggest obstacle between them and homeownership, despite market rumors that say millennials simply aren’t interested in homeownership.
What’s some advice for millennials looking to purchase a home?
Don’t go at it alone. There are countless resources to aid you in the process that millions have done before you. Though the Internet is a beacon of knowledge with seemingly unlimited listings and advice (such as this!), the Internet is no substitute for a Realtor. Realtors provide years of real estate experience that will come in handy in terms of finding the best homes, negotiating, contracts and more.
Zillow’s “5 Tips for Millennial Home Buyers” recommends that millennials ask the best resource around for advice: parents.
“They have been through the market before and can add value to the home search,” said the article. “They may be out of touch with social media and the technology available in the home buying process, but they likely have a solid financial opinion.”