Millennials are now the largest cohort of real estate players at 37%; Boomers follow them at 32%.
Who Are Millennials?
Millennial used to mean “young,” but now this largest demographic group is on its way towards middle age. Millennials were born in the early 1980’s through the mid-90’s, more specifically 1981 or 1982. The majority of this demographic is about 30.
Older Millennials experienced 9/11, the Housing Crisis/Great Recession and a terrible job market as they graduated from college with mountains of student debt. Younger Millennals were our first digital natives, “made” Facebook/ online video and fled from suburbia into big cities.
Importantly, Millennials re now the largest cohort of homebuyers, 37%.
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Millennial Economic Framework
The Millennial economic framework has been called “grim,” “challenging,” and “difficult” for good reasons. Millennials have and are continuing to live with the aftermath of the Great Recession, stagnating wages and earnings, significant student debt and now inflation.
According to George Ratiu, Senior Economist with Realtor.com, these compounding “challenges” “…(have) directly impaired a lot of people’s ability to save for a down payment” particularly because this demographic pursued jobs “…in high density, high-cost urban areas…” Additionally, new homebuilding has lagged for at least a decade.
Even in the midst of these economic complications, Millennials are buying houses. A recent survey from the National Association of REALTORS® (NAR) indicates that 50% of buyers ages 31-40 were former renters and that most first-time buyers are Millennials.
Redfin Chief Economist said, “I can’t think of a market where it’s been a harder time to be a first-time homebuyer (scant inventory, rising home prices, huge demand). And I think Millennials do feel fatigued by all the competition.”
Where Are Millennials Buying?
Even though the pandemic spurred remote work and interstate moves to places that used to be more affordable than the coasts such as Austin and Boise, overall, “Millennials are mostly looking within their current metro or at another (more affordable) metro in their current state,” said Realtor.com’s Ratiu.
A 2021 NAR survey indicates that buyers ages 31-40 are buying just about 10 miles from their previous residence to their new home. Ratiu said, “For a lot of Millennials who have spent the last decade moving to big cities to build their careers, they’re very much tied to those job markets.”
However, a lot of Millennials now have families and are looking for good schools, job security and home affordability. The result? A lot of Millennials are extending their commuting times and moving to suburbs near their “home” metro area.
Millennial House Preferences
Many agents say that Millennial buyers want convenience, low maintenance, walkability and affordability, if they can find it. If they can or can’t find affordability, according to Derrik Shockman, an agent with Windermere Abode in Tacoma, “I would say 40 to 50% of my buyers are looking for properties that have an additional unit, or where they could build an additional unit. They’re trying to offset some of their mortgage costs.”
“Or, “according to Kyle Whissel, CEO of Whissel Realty Group at eXp Realty, “…far more often, they want to Airbnb it.”
House references behind being move-in ready and affordable are having a space for pets and good schools.
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Thanks to Inman.