Millennials have now overtaken Baby Boomers as the largest population in the United States. Marketing to millennial homebuyers hasn’t been a top priority for many real estate agents in the past, but that’s all starting to change. Adults under the age of 35 – those who identify as millennials – are now buying homes at a higher rate than any other age group.
Shifts in generational thinking have transformed the way millennials approach home buying. However, you might be surprised to learn how millennials differ from the generations before them.
1. Home Ownership Isn’t a Top Priority
A recent study found that 90% of millennials intend to buy a home in the future, but only 4% plan on buying within the next year. More than 30% say they’ll wait five years or longer to buy a home.
Why the hesitance? That brings us to the next point.
2. They Have Unprecedented Debt
Most millennial homebuyers cite affordability as the biggest obstacle to homeownership. As housing prices in most areas continue to rise, wages remain stagnant. Millennials are also facing an unprecedented amount of both school loan debt and consumer debt. In fact, the average millennial has about $36,000 in personal debts, and many feel they’ll never pay it off. With every spare dollar going towards debt payments, millennials won’t have enough saved for a down payment for years to come.
3. Millennials Are Waiting to Get Married and Start Families
Today, American couples wait until they are about 30 years old on average to get married. Some say they’re not financially stable enough to get married, while still others want to focus on their independence and career goals rather than relationships. Whatever the reason, millennials aren’t starting families until much later in life than the generations before them. They’re having fewer children, if they have children at all. All those components mean millennials don’t see the need for single-family homes until they’re well into their 30s.
4. Millennial Homebuyers Prefer City Living
A Pew Research study found that 88% of millennials live in highly populated metropolitan areas. Younger renters and homebuyers say a thriving social scene and proximity to employment add to their desire to live in the city. However, as more people move to city centers, rental prices increase, leaving little money left over for millennials to save up a down payment.
5. They’re Competing with Boomers for the Same Properties
Many Baby Boomers are retiring and trying to downsize. The trouble is, millennial homebuyers don’t want to buy the Boomers’ sprawling suburban homes; they want smaller spaces, too. That means the real estate market sees two generations competing for the same properties while larger homes remain unsold.
Buying trends show that both Boomer and Millennial homebuyers want smaller homes with more upgrades and with easy access to amenities like walking trails and shopping.
6. Millennials Love Technology
When they are ready to purchase a home, millennials typically begin their searches online. This tech-savvy generation searches real estate websites about 99% of the time when looking for a home. They’re also more engaged in social media than any generation before them.
7. They Want Environmentally Conscious Solutions
In the era of climate change and global warming, millennials are more concerned than ever about green solutions. Home ownership is no different. Millennial home buyers want properties with energy-efficient solutions, built with sustainable materials when possible. Not only are these homes better for the environment, but they’re often more cost-effective.
Millennials are the new face of homeownership, and real estate agents should take note. Understanding and appreciating this younger generation of home buyers is the key to your success. If you’re looking for effective ways to market to millennials, check out this article for some helpful tips.
Do you work with millennials often? Let us know about your experience! Message us in the comments below or find us on Facebook!