No thanks to the housing crisis, millennials have been slower than previous generations in their transition from renting to owning. In fact, those born between 1985 and 2000 have been so sluggish taking steps toward home ownership that plenty of experts thought the majority of the generation would decide to remain renters (or squatters in their parents' homes) for their entire lives.
Fortunately, recent trends are showing that millennials do have an interest in buying real estate - but features unique to the millennial lifestyle determine when and where they will invest in property. Agents, housing developers, and researchers have taken time to study millennial buying habits to better understand their real estate needs.
Millennials Suffer Enough Debt
The average millennial boasts an overwhelming $37,000 in student loan debt - compared to the Gen Xers, who typically took less than $19,000 in student loans - as well as just over $2,000 in credit card debt. Plus, millennials with cars have an average balance of about $11,000 left to pay on auto loans. The prospect of adding a mortgage on top of these existing debts is daunting to most young people, whose salaries are about 20 percent lower than those baby boomers enjoyed when they were preparing to buy real estate.
Therefore, it is paramount that millennials seek out practical loan programs to suit their needs. Agents and realtors should be aware of loan programs that can help millennials afford the real estate they want and need, including those offered by the Federal Housing Association.
Millennials Wait for More Information
Millennials tend to be better educated than previous generations; even those without formal degrees are tech-savvy and proficient in finding information online. As a result, many millennials spend time reviewing their markets, finding viable properties, touring spaces digitally, and comparing their options. These days, even lenders offer mortgage resources online, so millennials can learn all about the mortgage process without leaving their homes.
With millennial buyers, agents are not in control of property information. In fact, the only reason millennials seek out real estate professionals is for help interpreting their findings and closing deals. Millennials want to be treated as partners rather than clients, which means exceptional customer service and no blatant sales tactics - dissembling around a millennial is a sure-fire way to end a relationship. Agents who have digital presences, including social media pages and engaging apps, are more likely to attract millennial attention while they are doing research for their future home.
Millennials Look to the Suburbs
For decades, young people have flocked to city centers, desperate to be part of the action - but no more. Millennials do enjoy the urban lifestyle, but most prefer to live in the suburbs. Having grown up in suburbs, millennials seem to feel more comfortable in the quieter, less hectic communities; plus, home prices tend to be lower and schools tend to be higher quality. Many suburbs are becoming revitalized with mixed-use areas, giving millennials the walkable, urban feel.
Millennials Like Communal Living
Millennials are incredibly collaborative in the workplace, and it seems their desire to be social extends to their home lives, too. Perhaps borne out of desperately low incomes, millennials have become accustomed to living in a communal environment, surrounded by friends or family. In searching for properties, millennials are looking for extra space they can use to build a community within their homes. Long-term tenants or travelers from Airbnb are sources of additional income and opportunities to learn and grow from fellow people - both of which excite millennial homebuyers.
Millennials Crave Quality
Perhaps contradictory to their cost-conscious habits, millennials often long for high-quality, expensive features in their homes. Stainless steel, energy-efficient appliances, granite or marble countertops, hardwood floors, finished basements - millennials want to see their homes to their liking before they move in.
Unfortunately, this means many millennials are blind to the bones of a property; if the paint is the wrong color or if the kitchen cabinets are outdated, they will often quickly move on. Agents should be careful to explain relatively minimal costs of fixing or installing and provide referrals to reputable contractors. Then, millennials will be able to find a home they can love and afford.
