Millennials And Home Buying In The United States
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Housing markets across the country are at the top of the list, with the opportunity for potential home buyers to get their foot in the door. [Sources: 1]
This is particularly true for millennials, with nearly half of respondents identifying the cost of living as one of the biggest obstacles to buying a home compared to other generations. This puts millennials on track to overtake the Gen Xers and boomers, who are expected to make up more than a third of all US home buyers by 2040. Student loan debt, which currently stands at $1.6 trillion, is also getting in the way of millennials, with 23 percent citing it as a barrier, compared with just 12 percent of baby boomers who plan to buy a home, according to the survey. [Sources: 1, 3]
Housing experts have found that by 2020, millennials will move away from owning single-family homes in suburbs and instead own homes in urban areas such as New York, Los Angeles and San Francisco. This is good news for the housing market, which assumes that millennials do not have the same access to affordable housing as their parents and grandparents. [Sources: 3]
According to Pew Research data, more than 4.5 million millennials will be 30 by 2020. In fact, 43.6 percent of them own homes in Des Moines, Iowa, and even in Phoenix, Arizona, the proportion of millennials owning homes is 30 to 35 percent. [Sources: 3, 5]
Millennials became the largest group of home buyers earlier this year, according to data from the National Association of Realtors (NAR) and the US Bureau of Labor Statistics. [Sources: 5]
A recent study by Apartment List also found that 80 percent of millennials want to buy real estate to see if the dream of owning a home is still alive for this generation. Given that more than one-third (33%) of young adults in the United States believe that buying a home is a good financial investment, it is not surprising that many in this group want the opportunity to start building equity in their homes. While millennials have waited longer than their parents to buy a home, there is an interest in becoming homeowners. [Sources: 4, 5]
While millennials are turning to home buying, some cities have proved more attractive than others. Millennials reportedly tend to choose cities that already have a high concentration of high-value real estate, such as New York, Los Angeles and San Francisco. According to a survey by Apartment List, these are the cities where millennials are taking root to buy a home. [Sources: 4]
It makes sense, therefore, that millennials would rather rent than buy and wait for the right home to appear. Baby boomers’ homes are often located in unattractive locations in metro areas that favor younger generations. They are also oversized and outdated for millennials who prefer smaller homes with a more modern design. [Sources: 7]
As you may have heard, millennials can’t afford to buy a house because they spend all their money on latte macchiato and avocado toast. Millennials still can’t afford to invest in homes and don’t think it’s worth it. [Sources: 0, 7]
Millennial homeowners have specific – and sometimes uncompromising – preferences when buying a home, according to a survey of the housing market published in the Washington Post. Millennials own less than half of what baby boomers had at their age, Christopher Ingraham reports for The Washington Post. With data from the National Association of Realtors now showing that millennials make up only about 1.5% of American households – and the public buying – it’s time for the naysayers to take them seriously. Millennials own more than twice as many homes as their parents’ generation. [Sources: 0, 7]
Rising housing costs and debt make it harder for millennials to afford homes. It doesn’t help that there is a shortage of starter homes and millennials don’t want to buy the homes that baby boomers are trying to sell. [Sources: 7]
The latest is Millennials’ delayed entry into the housing sector, telling a grim story. Thirty percent of young millennials live in their parents’ homes rather than buy a home. One in five bought a home in rural areas and one in four in urban areas. [Sources: 2, 7]
They are the largest group of home buyers of all generations, overtaking the baby boomers and Generation X. Just like the “silent generation” of baby boomers, young millennials are more likely than their parents to be with friends and family when buying a home. [Sources: 2, 6]
What sets millennials apart from previous generations is that they love electronic devices, speed and convenience. Unlike older people, millennials are far more likely to ask friends and relatives for advice on property. They also go online to collect research and information before entering a property lender’s office. [Sources: 6]
In many articles on millennials, the Pew Research Center defines them as those born between 1981 and 1997. If you have been following the trends in real estate in recent years, you may have seen an increase in the number of millennial home buyers and sellers. According to the 2017 National Association of Realtors’ Intergenerational Development Report, 23 percent of millennials as home buyers said saving for a deposit was their top priority. While millennials in many parts of the country are no longer buying homes as previous generations did in their 20s and 30s, they are gaining momentum and speed. [Sources: 5]
Cited Sources
- https://www.architecturaldigest.com/story/millennials-are-now-the-largest-group-of-home-buyers 0
- https://www.bankrate.com/surveys/down-payment-survey-september-2019/ 1
- https://magazine.realtor/daily-news/2019/04/01/how-well-do-you-know-millennial-buyers 2
- https://blog.cort.com/real-estate/what-millennials-home-buyers-are-looking-for-in-2020/ 3
- https://sundae.com/blog/millennials-are-buying-homes-in-these-top-cities/ 4
- https://education.bankerstrust.com/articles/millennials-and-home-buying/ 5
- https://www.timios.com/posts/what-millennials-want-out-of-the-home-buying-process/ 6
- https://www.businessinsider.com/millennials-own-less-real-estate-than-boomers-statistic-2020-1 7