There’s no shortage of articles covering Millennials. Their habits in the worlds of entertainment, retail, community engagements and so many other areas of society have been studied and dissected with sharp focus over the past several years. While some may think it’s a topic that’s been covered enough, I see new trends developing.
As with every generation before, Millennials are growing older and their needs are evolving, including their real estate and home loan needs. Keeping a close eye on who Millennials are and their current needs helps me (as well as my business partners) prepare to provide them service beyond belief. [Have no fear, Gen Xers, Baby Boomers and members of the Silent Generation – I'll provide you service beyond belief too!]
As a quick refresher, Millennials were born roughly between 1982 and 2002 and are estimated to total over 80 million or 25% of the population. Among their many attributes, American Millennials are known statistically for the following:
- 86% own a smartphone
- 83% American Millennials smartphone owners text more than talk
- 18 hours/week on their cell phones
- 30% use their smartphone for a purchase at least once a week
- More than 40% of American Millennials are parents (with an estimated 80% being parents by 2026)
- 81% use YouTube
- 67% feel they can find a YouTube video on anything they want to learn
- 64% would like to occasionally work from home
- 60% think they would be more productive working from home
All of the above facts help paint a general picture of today’s Millennial home buyer, what they are looking for, and great ways to reach them.
Compared to previous generations, Millennials have delayed the home buying process for several reasons. Despite facing increased costs of college, Millennials make up the most educated generation; in turn, they are entering the housing market with the most debt, mostly from student loans. Partly due to student debt and partly due to a greater number of women in the work force, Millennials are also marrying and starting families later in life. During this present decade, the median age for a person getting married is 30 years old, compared to 23 year old in the 1970s.
Gradually, I'm seeing more and more Millennials reaching the point that homeownership is a possible financial and preferred personal option. In 2016, Millennials made up 66% of first time homebuyers according to a study of the National Association of Realtors (NAR). The upward movement is continuing this year. Studies by Ellie Mae from April 2017 report Millennials comprised the largest group of homebuyers, accounting for 89% of all purchase loans, up 1% from March. Even though the overall rate of homeownership for people under 35 still lags slightly behind other age groups, comparing the second quarter of last year to this year showed an increase from 34.1% to 35.3% according to the Census Bureau.
Slowly but surely Millennials are purchasing homes. I love to lead Millennial clients in their house hunting adventures and direct them to my lending partners to guide them through their mortgage financing needs, I need to know what they are looking for. What are effective ways to help them find the home of their dreams?
The first thing to recognize is that dreams of an older generation may be Millennials’ nightmares. Because traditional Millennials are marrying and starting their families later in life, their initial home needs may differ from first time homebuyers of previous generations. A house with extra rooms and a larger lot for a swing set may not be high on the list of requirements. Instead, they tend to look for homes that provide easy access to urban areas with suburban features; these typically have smaller yards and could also take the form of townhomes or condos. There is evidence of where Millennial homebuyers are shopping; according to a National Association of Realtors study, only 15% bought in downtown areas in 2016. That is down from 21% two years before. Even though there’s a slight migration towards suburbia, with a third of Millennial homeowners dwelling downtown, it is the generation with the most members living in the urban core.
Also, unlike many generations of workers before, Millennials have more options to work remotely from their jobs. The company headquarters could be in Texas while the team member could live in Oregon or wherever they choose. This flexibility allows more freedom to the current workforce like never before. With this sense of mobility, some Millennial homebuyers shy away from houses that require too much maintenance. Like those of us from other generations, they may enjoy watching the house flipping shows on HGTV, but could be less likely to be interested in actually doing the work. The flexibility to travel more or relocate easily creates a fear of commitment to too many in depth housing projects.
I'm here, not to generalize, but to provide my clients the personalized, boutique-style service I'm are known for. Contact me today so I can get you started on the exciting journey home.
Jeff@arizonasrealty.com or call 602-531-0435