Millennials make a huge impact in many areas of our society, and real estate is no exception.
Before we delve into how these younger Americans affect the housing market, let’s define who we’re talking about. Anyone born between 1981 and 1996 (that means ages 22 to 37 in 2018) is considered a millennial, according to the Pew Research Center.
Millennials are poised to become the largest generation, surpassing baby boomers in population in 2019 as their numbers rise to 73 million.
This many people are bound to affect the housing market. Millennials account for about two-thirds of all first-time homebuyers — and 34 percent of all homebuyers in general, according to Inc. magazine.
More than 66 percent of millennials plan to buy a new home within the next five years, which will mean a significant generational shift in real estate.
“There’s been an influx of millennial home buyers this year, as older millennials have had some time to grow in their careers and pay off student loan debt,” said Stuart Eisenberg, national director of real estate and construction practice for accounting firm BDO USA.
They Love Their Tech
Millennials came of age during the internet explosion, so it’s no surprise they rely heavily on technology when they’re searching for homes.
According to a 2017 report from the National Association of Realtors, 99 percent of millennials search online to get information about homes and home buying. More than half of millennials — 58 percent — find the home they want to buy via their smartphone or tablet.
Tech also affects how millennials communicate with their real estate agents. They tend to prefer text messages for scheduling appointments and asking questions.
Varying Home Preferences
Millennials also came of age during the era of the Great Recession. They’ve had to deal with stagnating wages and increasing student loan debt, which meant repercussions for how they approach home buying.
The results have varied:
- Because they rented longer than usual, they may skip a starter home and go for something bigger and more expensive.
- Because they waited to buy, they may opt for a fixer-upper they can put their stamp on and stay in longer.
- Because they may not have much cash left after saving for a down payment, they want everything to be just right when they move in.
Their Favorite Location May Surprise You
Nearly half of all millennials — 47 percent — live in the suburbs. While that may seem surprising, the reason isn’t: It’s all about cost.
Just like generations before them, millennials are willing to live further from urban core areas to find bigger homes and more amenities they can afford. Although about a third of millennials live in cities, the rising costs of these popular areas has pushed many others farther away.
All of these factors will continue, because the generational shift in home buying is just getting underway. “Expect more disruption in the next five years as millennial home buying accelerates,” said Eisenberg.
No matter which generation you represent, if you’re interesting in buying, selling or investing in real estate — contact me for a free consultation. I’ve helped numerous Northern Virginia residents through the process, and I’d be happy to help you, too!
A lifelong resident of Northern Virginia and a top-producing real estate agent, Samantha Bendigo knows buying or selling a home is more than just a transaction — it’s a life-changing experience. Over the course of 14+ years, she has closed 500+ real estate transactions with over $100 million sold. Helping homebuyers and sellers throughout the Northern Virginia region, Samantha specializes in Vienna, McLean, Fairfax, Alexandria, Arlington, Prince William County, Fauquier County and Loudoun County.
Email Samantha Bendigo at Virginia Luxury Homes today, or call 703-628-2420 to discover how you can start living in the home of your dreams.