As the largest and fastest-growing segment of homebuyers today, millennials are changing the real estate game. When it comes to millennial real estate, there are several driving factors that are impacting their decision to enter the housing market.
Millennial homebuyers range from those born in 1981 to 1996 and are currently between 25 to 40 years old. About 4.8 million millennials are turning 30 in 2021 and are expected to enter the housing market if they have not already. Millennials have worked to grow in their careers to earn higher income, pay off student loans and personal debt in order to make a financially conscious decision.
During the 2008 housing crisis, many people bought homes that they couldn’t afford. This memory has reminded millennial homebuyers that their first home doesn’t have to be their dream home. Because of this, many millennials are open to purchasing multi-family homes such as condos so that they can begin building their wealth.
Compared to previous generations, millennials waited longer to buy their first home. From rising student debt and employment struggles from COVID-19, many chose to move back into their childhood homes to save. According to a Pew Research study, 52% of adults aged 18-34 are living with their parents due to economic factors, the largest percentage since the Great Depression. But now as the economy bounces back, millennials are looking to make the investment.
Over the past year, COVID-19 has changed the economy and shifted the game. Thanks to low-interest rates, millennials could take advantage of personal growth opportunities like purchasing their first home. This allowed them to stretch their budgets a bit due to the low-interest rates combined with student loan forbearance and savings from quarantining.
Millennial Real Estate Trends
From building equity to finding more space for their growing families, millennials are looking to finally enter the market. But what are they looking for and how are they changing the real estate game?
For millennials, technology has become a critical part of the home buying process. Millennials are searching online to learn more about the market, view, and even buy their homes.
Since many millennials are looking for homes online, it shouldn’t surprise us that many are turning to the online mortgage industry to shop around for loan options.
From browsing for homes to comparing mortgages online, technology is a big trend in millennial real estate.
Due to the rise of technology, realtors are changing their job descriptions. Before homes were readily available at a click of a button, realtors would provide information to interested buyers. Now millennials turn to realtors for negotiation skills and building relationships in the market.
Cities to Suburbs
In order to stretch their dollar and find more space, many millennials are choosing to move further from cities to suburbs. By moving to suburbs, millennials are finding more affordable communities with retail, access to green spaces, parks, and nice schools for their kids.
In addition to living in community-centric locations, millennials are looking for homes that offer energy-efficient options. Even if home prices are higher than desired, millennials look for opportunities to decrease their heating, cooling and electricity costs to save money while helping the environment.
As the economy continues to shift and the housing market remains competitive, these millennial real estate trends still remain critical during their homebuying journey.