It’s a popular trend to point to millennials as the “next big trend,” but when the data backs it up, it is worth taking a second look at. This is the case for data that points to millennials as a driver for growth in the real estate market.
If you are an agent who has yet to start putting together the millennial puzzle, you just might get left behind in the drive to capture their business. Not to worry, we are here to help you.
According to the National Association of Realtors’ 2017 Home Buyer and Seller Generational Trends study, millennials make up the largest group of home buyers (34 percent) for the fourth consecutive year. Their older counterparts, the baby boomers, make up 30 percent of buyers.
Jeremy Wacksman, chief marketing officer at the Zillow Group said the thought that millennials don’t want to own things is a myth easily dispelled. “Millennials are not just starting to buy homes; they’re powering the housing market.”
NAR Chief Economist Lawrence Yun said in a statement that millennials have been fairly slow to get into the market.
“We are seeing an uptick in millennial buyers this year — which is a good sign, because as home values rise, we want a wider number of people to participate in this housing recovery,” Yun said. “There’s a pent-up demand and as the economy continues to improve, we expect to see more people in their early thirties, adults who are still living with their parents — clearly not their idea of the American dream — begin to look for their own housing units.”
As the economy gradually improves, searching for stable jobs and finding long-term living options is becoming a goal for many millennials.
Mark Fleming, chief economist at First American Financial Corp., points out that demand for homes from millennials is increasing, in contrast to the idea that they may prefer to rent.
The company surveyed title agents and real estate professionals and found that the perception that millennials are choosing to rent rather than buy a home just isn’t the reality.
“Title agents and real estate professionals estimated that the average age of the first-time homebuyers that they work with is between 26 and 30 (55 percent), or 31-35 (32 percent). In fact, combined, 26-to-35-year-olds accounted for 87 percent of first-time buyers, according to survey participants,” Fleming said.
Fleming added that demand for homes from millennials is increasing, in contrast to the idea that they may prefer to rent.
In fact, research done by the National Association of Homebuilders found that more than 90 percent of millennials say they eventually want to buy a house.
In line with generations before them, millennials are challenged by saving a down payment but realize that buying a home is a better financial decision than long-term renting.
For real estate agents, being accessible and knowledgeable about the wants and needs of your millennial clients will go a long way in enabling you to capture their business now and in the future.