What Sellers Should Know About Millennial Homebuyers
When it comes to the home buyer market, many real estate experts have been stumped by Millennials. Until recently, their patterns and interests in home buying have been pretty irregular. Compared to their predecessors, The Baby Boomers (1945 – 1964) and Generation X (1961 – 1979), Millennials (1980 – 1995) are the largest generation in history sitting right around 90 million. They’re a generation characterized as being self-confident, technology-driven, highly educated and social. So, what is it that they’re looking for in a home?
Millennial consumer habits have been puzzling to all, as they seem to ignore traditional paths one minute then crave them the next. And, now that most members of this generation have reached adulthood, we’re starting to see what values are motivating them to become home owners. Here’s some insight into what they’re looking for and what driving forces are behind their decisions:
- Millennials are taking their time to buy. As many Millennials have had to move back in with their parents after college, most are waiting longer to buy their own homes. It’s been referred to as the Boomerang Effect, a phenomenon that has taken place for many reasons, including the fact that Millennials have been faced with a lack of steady income as they entered into a tough job market after graduating. A recent study even indicates that only about half of adults aged 23 to 26 have steady full-time jobs. We’re also seeing Millennials wait longer to get married. For these reasons and more, this generation is delaying the home buying process.
- Recession is on the mind. Most Millennials have a recession mindset, as they were very much affected by the Great Recession. Because of what they’ve experienced and witnessed, they tend to be more thrifty and cautious when it comes to financial decisions, especially while carrying large college debts and facing poor job prospects. Most just can’t afford to buy a home right now.
- Millennials want different things in a home. When they are finally ready to buy a home, Millennials tend to be more frugal and smart with their choices. Some experts say that they’re actually more willing to sacrifice on their wish lists than previous generations to save money. They’re also more likely to buy smaller, older, used homes than generations past. To them, it’s more about affordability and convenience than showing off. For previous generations, homes were often purchased as status symbols or long-term investments. For Millennials, it’s simply a rite of passage that solidifies their independence.
- Millennials search online first. Before this generation even enters the real estate market, they do their homework. Technology has become a huge part of the home buying process for them, with the Internet, and mobile devices in particular, being their go-to stop to begin their home search. It’s estimated that half of those buyers even go on to find their new home through their online searches. For real estate agents, this means that Millennial clients will come in knowing exactly what they want, and they will be well-educated on the market and the process they’re entering into.
- Millennials want to be home owners. Contrary to what most of the real estate industry has been led to believe, that Millennials just don’t want to buy homes, the truth is actually quite the opposite. In fact, single, employed Millennials are now more likely to own a home than both Baby Boomers and Generation X were at the same age. And, as they continue to get older, marry, pay off debts and settle down, we can expect to see Millennial home buying trends skyrocket.
When it comes to home ownership, Millennials may be late bloomers, but they’re definitely not absent from the market. In fact, they’re presence is showing up stronger than ever. They’re excited, and they’re finally ready to move in!