Six Things to Know About the Millennial Housing Boom
The next in line to defining our communities are the Millennials. This generally refers to people born between 1980 and 1995. Think about this for a moment: how different are you from your parents’ generation? Now imagine the cultural gap between many association members and this younger wave of residents. Recognizing Millenials’ behavioral and buying habits is important for associations to successfully develop programs in order to continue to find ways to keep them engaged. Here is some helpful information that pertains to the Millenial-buying boom.
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|33 & Below
1. There’s a lot of them.This is the biggest generation since the Baby Boomers. That means residents aged 33 and under are about to play a huge role across the national stage...and in our communities. In fact, one report estimates that in the next five years, 8.3 million new Millennial households will form. This also translates to big business. The Demand Institute reported that Millennials spend $1.6 trillion on home purchases and $600 billion on rent.
2. They’re buyers.The culture of home ownership seems to be ingrained in Millennials. Creating transitional programs to keep them involved in our communities is a key element when we think of our successors making changes, which is bound to occur. A report by the National Association of Realtors found that 87% of recent buyers aged 33 and younger said they consider their home and condo purchase a “good financial investment”. That same report indicates that about half of these buyers made their decision simply out of a desire to own rather than rent.
3. They’re stable.The median income for this group was reported to be $73,600. With that being said, it’s good to know that this isn’t a buy-and-flip generation. They are making a purchase and they plan to keep it. 87% of Millennial buyers report that they plan to stay in their homes for a median of ten years. Nearly all of them financed their homes, so they have the financial wherewithal to secure mortgages.
4. They’re trending westward.The best purchasing markets for Millennials is geographically specific. By that, it means pretty much anywhere except back East. The NAR reports that the most Millennial-friendly markets include Austin, Dallas, Denver, Des Moines, Grand Rapids, Minneapolis, New Orleans, Ogden, Salt Lake City and Seattle. Though Washington, D.C. and Raleigh, NC showed some potential, the majority of markets trended West or Midwest.
5. They rely on their mobile devices.No surprise here, smartphones are a huge part of the lives of Millennials (this goes for those Gen X-ers, too). More than half of Gen Y homebuyers used a mobile device during their home search...and their generation was the highest percentage of buyers to report ultimately finding the home they purchased on their mobile device at 26%. Incidentally, all generations – from Millennials to Boomers – cited consulting the Internet as their first step in the home buying process. Being able to use all of their “toys” is high on the wish list when purchasing a home. This includes tablets, audio systems, programmable LED lighting, energy-efficient heating and cooling systems.
6. They’re first-time buyers.It makes sense that younger purchasers report the highest incidences of first-time buying. That holds true with Gen Y, who occupy the largest share of first-time buyers at 76 percent.
No doubt about it, Millennials are changing the face of home buying, and our communities. Understanding a generation that’s willing to put down roots and feels strongly about home ownership – but who is also more likely to go to a smartphone than a neighbor for questions or help – can help associations develop programs that help Millennials feel more engaged. After all, these “kids” are now the grownups who will be leading our communities. For more research and insight, contact FirstService Residential.