Millennials are the largest group of home buyers, making their needs and buying trends some of the most important to watch. Half of home buyers are under the age of 36, with buyers between the ages of 18 and 34 creating 42% of the real estate market. This age group has waited longer than any other generation to make the leap into home ownership, but as more 30-somethings buy their first home, buying trends give us insight into how builders and current homeowners may change their properties to sell more quickly.
Rent Longer, Buy Pricier
A Zillow study that analyzed 13,000 homeowners, buyers, and sellers, found that two-thirds of millennial home buyers considered sticking with their rental property at some point during the home buying process. While these buyers traditionally lease a property longer than older generations, they’re willing to spend more on their first home. Baby Boomers were content with a starter home price tag, but today’s 30-something spends a median $217,000 for a home. Even more revealing about future home sales is that the generation behind millennials – Gen X – is spending 11 percent more than millennial counterparts. Not surprisingly, the higher mortgage isn’t getting today’s buyer any more home than previous generations, as the median millennial home is 1,800 square feet.
Today’s homebuyers come from a diverse background. Of millennial house hunters, there is greater diversity within the group compared to other buyers:
66% are white
17% are Latino or Hispanic
10% are black
7% are Asian or Pacific Islander
Diversity isn’t as strong across all homeowners:
77% are white
9% are Latino or Hispanic
9% are black
5% are Asian or Pacific Islander
While Zillow reports a dedicated 25 percent of millennial house hunters gravitate to large, urban areas, more than half have a desire for shared amenities. Shared community amenities – clubhouse, swimming pool, gym – are important to 54 percent of the home buyers within the generation. The desire for communal conveniences points new construction builders to taking the time to incorporate community amenities like outdoor grilling spaces, green spaces or dog parks and workout spaces.
Technology For The Sale
Millennials will be the first to use online tools to find and compare homes for sale. Some 90 percent of 30-somethings will incorporate online resources into the home buying process, with 25 percent of buyers using at least five different digital platforms and more than 66 percent utilizing affordability tools to judge mortgage options.
Technology is also the preferred way of communication by millennial buyers. The 30-somethings will talk to more agents than other home shopper or sellers before deciding on a realtor who fits their needs. Millennials will contact two realtors on average when buying and at least three for selling. For real estate agents wanting to be picked by this age group, online reviews are key – 60 percent of millennial buyers and sellers read online reviews of a realtor before hiring. For agents deciding how to best communicate with a millennial client:
30% of millennials prefer to talk to their agent on the phone
24% of millennials prefer to talk to their agent in person
18% of millennials prefer to talk to their agent via text
One of the best characteristics of a millennial buyer or seller is their tendency to stay in touch with a realtor after closing and recommend the agent to family and friends.