It seems like just yesterday discussions focused on Millennials addressed more youthful topics like getting their drivers’ licenses or applying to colleges. Now, older Millennials begin turning 40 years old. This generation has been “adulting” for quite some time now.
As with every generation before, Millennials have grown older, and their priorities have changed. To ensure we continue to provide them remarkable service, we at BluPrint Home Loans keep a close eye on Millennials’ evolving needs, especially those regarding home financing. How has aging affected the Millennials home buying journey?
[Have no fear Gen Zers, Gen Xers, Baby Boomers and members of the Silent Generation – we’ll provide you exceptional service too!]
In order to best serve a generation, we first must know them.
According to the Pew Research Center, Millennials’ birth years range between 1981 and 1996. Numbering at 72.1 million, it is the nation’s largest living generation. While every member of each generation is an individual, general facts about American Millennials include:
The above facts are just the tip of the iceberg when it comes to available information on this generation. Researchers have conducted countless studies on this generation. You can find statistics on almost every aspect. Using the easily-accessible information allows us to better serve Millennials in the home buying market.
Compared to previous generations, Millennials tend to delay the home buying process for several reasons.
Despite facing increased costs of college, Millennials make up the most educated generation. Because of resulting student loans, they enter the housing market with the most debt. Research offered by the National Association of Realtors, the median amount of student loan debt for buyers between the ages of 30 to 39 is $34,000.
Millennials also bring a greater number of women into the work force. While these numbers do not directly hinder Millennials from buying a home, they do affect their views on starting a family.
Student debt and the larger percentage of women working impact this generations’ approach to creating a family. Millennials marry and start families later in life. Studies show the average age women marry is 27.8 years. The average age of men to marry is 29.8 years. Compare that to 1920 when the average ages were 21.2 years and 24.6 years for women and men respectively.
As Millennials continue to age, their student loan debts decrease, their incomes tend to increase, and their families grow. These factors change their home needs as well.
Gradually, Millennials reached the point where homeownership is a possible financial option and a preferred personal choice.
In total, Millennials are the largest percentage of home buyers at 38%. The 2020 National Association of Realtors Home Buyer and Seller Generational Trends reports 52% of those on the older end of this generation (30 to 39 years) were first-time home buyers. Meanwhile, the percentage on the younger end (22 to 29 years) who were first-time home buyers was 88%.
The year 2020 introduced another major influence to the real estate market. Like everything else, the timing of this particular generation’s decision to buy a home was not immune to Covid-19. Because of the pandemic, nearly half of millennials surveyed said they will speed up their plans to purchase of a home.
Before our business partners lead Millennial clients in their house hunting and before we guide them through their mortgage financing needs, we need to know what they are looking for. What are effective ways to help them find the home of their dreams?
Clearly, not every generation is the same. Millennials’ initial home needs differ from first-time homebuyers of previous generations. As we mentioned, they typically marry and begin their families later in life. A house with extra rooms and a larger yard for a swing set may not be high on their list of requirements.
Business Insider reports that Millennials show to be comfortable purchasing homes smaller than those of the generations before them. This openness to smaller spaces introduces many additional options like townhomes and condominiums into their home search.
The evolution of the business world also plays a role in where Millennials look to buy. Many employers offered remote-work options before 2020. This became much more prevalent during Covid-19. In fact, companies who did not have this as a standard practice before the pandemic are likely to adopt working-from-home policies in some form even after this is behind us.
This broadened flexibility allows more freedom to the current workforce like never before. Home location options now expand from a neighborhood near the office to practically any town in any state. They now can choose to live in an area best matching their lifestyle.
The National Association of Home Builders shares a study by HousingEconomics.com. It shows Millennials spilt evenly regarding their preference to live in rural, outlying suburb, close-in suburb or central city areas.
So, where are Millennials typically buying homes? Easy. Everywhere.
Next week, we continue this two-part series. Our next post shares good things for sellers to know when trying to catch Millennial homebuyers’ attention.
Every homebuyer is different. Each home loan scenario is unique. Whether serving Millennials, Gen Xers, Baby Boomers or those in the Silent Generation, we at BluPrint Home Loans never lose sight of the individual. We are here, not to generalize, but to provide you the personalized, boutique-style service we are known for. Contact us today so we can get you started on planning your home financing journey.