There was a time when most people waited to get to the age of 40 or more before purchasing a house for themselves. However, that scenario has changed entirely since 2010.
Nowadays, millennials are getting done with their leases, moving out of their parent’s homes, and buying property. Almost 43% of homebuyers are millennials, as per a report by NAR (National Association of Realtors).
But how are they changing the game in business? Is millennial prominence offering anything to the industry? How does the behavior of the Millennials as home buyers seem? We have explained everything in this article. So, let’s take a look at them.
Millennials as Home Buyers – How Does the Scenario Look Like?
As of 2019, around 72.1 million millennials are living in the US, according to the Census. Among them, almost 18% are aged between 23 and 31. So, it’s pretty natural for the industry to change a little and ooze a similar kind of energy as the buyers.
Here’s what the result of the transition looks like:
1: Technology-Oriented House-Hunting.
Unlike the older generation, millennials are dedicated to technology. Thus, it’s no wonder they always opt for a tech-oriented route in house hunting. According to a report, almost 99% of the younger generation seek their dream house online.
Besides, people are also opting for a virtual tour of the new house instead of visiting. In this case, almost 59% of millennials agree that there’s no reason or need to spend extra time.
2: Text-based Communication.
The modes of communication between the older generation and the millennials are also different. For instance, they choose text-based communication instead of sitting in a room together and talking face-to-face. It’s faster, easier, and more convenient, according to them.
Amongst millennials, texting is being used to do the following –
● Scheduling an appointment
● Expressing interest in a property
● Asking questions about the house
Phone calls are generally reserved for a more pressing or urgent concern. And texting is more of an immediate back-and-forth line of contact. As per NAR, most real estate agents are also adapting to this demand for electronic communication.
Currently, around 90% of the agents communicate via text, and 94% opt for email. Besides, another 34% focus on chatting through instant messaging.
3: The ‘Close to Work’ Attitude.
Instead of looking for something more affordable, millennials prefer living in a house close to their workplace. Almost 44% of people also back this viewpoint, while 58% look for affordability and neighborhood.
A Zillow report has also revealed that 47% of millennials prefer living in the suburbs, as it’s less crowded and more comfortable.
4: More Mortgage Debt.
Unlike the older generation, the millennials are more concerned about how their house should look. As a result, they overspend to get what they refer to as their “dream home.”
Yet, in most cases, they need adequate savings to pay for what they’re about to produce. It, in turn, can increase their mortgage debt.
In fact, as per a study by USA Today, the average millennial owes around 10% more than an older individual. It’s pretty alarming.
5: The Sense of Women Empowerment.
There was a time when men used to dominate the real estate industry. But, the scenario has changed since then. Millennial women are rising, making up around 48% of independent homebuyers.
Yes, most homeowners are indeed couples. But the scenario in that segment is changing too. Almost two-thirds of women are considering buying a home before marriage nowadays. And most of them do so by taking a loan from a financial service provider.
6: A More Careful Buying Scenario.
According to a report, millennials are more cautious about buying a house when compared to baby boomers, with almost 90% going for a “sight unseen” option. It means they will only accept a home after taking a virtual tour of the exact location and seeing plenty of images.
In some cases, they’d also love to have one of their close friends or family members check out the property in their absence.
7: The Popularity of Fixer-Uppers.
Considering the real estate market’s competitiveness, millennials are also buying houses that need significant repairs. And 82% of people have agreed to it as well.
To begin with, purchasing a fixer-upper can help them decorate their house.
It can be done from scratch, and there’s no need to pay a massive amount for a new and well-furnished house. Instead, they can take their own sweet time to create the ambiance and beauty they want.
Thinking about Getting a New House?
Purchasing a property and taking a loan has become common among millennials. And it’s affecting their budget to some extent too.
Don’t get us wrong, though. We are not saying that taking a loan is a bad thing per se. But it is risky considering the interest you might have to pay.
In a worst-case scenario, it might max out your budget too.
Hence, you should save cash as early as possible when considering buying your dream house. Also, getting a fixer-upper can be an excellent option, considering the tag they come with. Once you have your home, you can build it whatever you want.
And remember to play, no matter what you are going for. Always. Take the help of an expert if you need it. We buy houses in Jacksonville, FL, which is the focus of ALKO Home Buyers. But don’t get too lazy while getting a place.
It’s your future you are building, after all!
Check out this article: Most Common Maintenance Pitfalls When Buying a House
Frequently Asked Questions
Millennial home buyers tend to prioritize location, walkability, and proximity to amenities. They also tend to be more environmentally conscious and interested in energy-efficient features in a home.
There are several factors that have contributed to millennials being slower to purchase homes than previous generations. These include high levels of student loan debt, difficulty saving for a down payment, and a preference for urban living and renting.
Yes, millennials are buying homes, but at a slower rate than previous generations. However, as they age and their financial situations improve, more millennials are entering the housing market.
Millennial home buying habits tend to differ from those of previous generations in that they prioritize location and walkability, are more environmentally conscious, and are more likely to be interested in energy-efficient features in a home. They also tend to have a preference for urban living and renting, which has led to a slower rate of home buying among this generation.
The biggest challenges facing millennial home buyers include high levels of student loan debt, difficulty saving for a down payment, and limited affordable housing options in desirable locations.