Millennials finally seem to have cut down their avocado toast intake enough to become a major part of the real estate landscape.
According to the American Community and American Housing surveys, there are 66 million millennials in the U.S., and they now represent 37 percent of the total national homebuying market.
Millennials approach homebuying differently than older generations. It’s not just an obsession with Zillow browsing, but also different preferences for what they want in a home and more comfort in relying more heavily on digital processes from walkthroughs to closings, so the landscape is shifting to accommodate their needs and desires.
Key millennial homebuying statistics
- Millennials are the fastest-growing segment of homebuyers, accounting for 37 percent of the overall U.S. housing market.
- Millennials make up an even bigger share of first-time homebuyers. In all, 82 percent of younger millennial buyers (ages 22-30) and 48 percent of older millennial buyers (31-40) purchased their first homes between July 2019 and July 2020.
- First-time buyers represented 31 percent of all purchasers in the National Association of Realtor’s most recent annual survey, though that number has since dropped off
The National Association of Realtors estimates that 99 percent of millennials use the internet during their homebuying process.
Millennials changing the housing market
Millennials are typically defined as people born sometime between the mid-1980s and mid-1990s, and their entry into the real estate market has looked different than that of older generations.
Generally, millennials are buying their first homes later than their baby boomer parents. There are a number of reasons behind that delay, but high student loan debt loads and the lingering effects of career stagnation caused by the Great Recession are some of the most commonly cited reasons.
Prior to the pandemic, more than half of millennial respondents to a Bankrate survey said they weren’t earning enough money to buy a house, and nearly a quarter said student loan debt was holding them back. Since then, more millennials have managed to become homeowners, but those barriers remain in place for many others.
Millennials slower to buy homes
In addition to being held back by financial considerations, many millennials are in a general pattern of reaching life milestones later. The average age for getting married has been rising, for example. The U.S. Census Bureau reported that in 2020 the median age for a man’s first marriage was above 30 for the first time in history, while the median age of a first-time bride was above 28, also for the first time.
Subsequently, millennials are starting their families later, and have been renting for an average of six years before buying, according to Zillow.
How millennials and use technology for homebuying
Whether it’s browsing real estate listings online or applying for their mortgage through an app, millennials are more likely than previous generations to take advantage of tech innovations in the real estate sphere.
The National Association of Realtors reported as early as 2017 that 99 percent of millennials used technology at some stage of their homebuying process. The coronavirus pandemic only made tech options more diverse and entrenched.
The growing popularity of virtual showings, increased opportunities for e-closings, the rising clout of iBuyers that put the whole home-selling process online and other trends all underscore the importance of digital innovations to millennial homebuyers. These shifts continue to shape the property sales landscape.
Tips for millennial homebuyers
If you’re looking to buy a home, there are a few key bits of advice to keep in mind:
- Be sure to find a trusty real estate agent to work with. The market has been especially competitive lately, so you’ll want someone to guide you through the bidding and buying process.
- Shop around to multiple mortgage lenders to make sure you’re getting the best deal. It’s not just about interest rates, but the all-in costs and other terms and conditions on your loan.
- Be sure to make a budget and stick to it. You don’t want to wind up with more house than you can afford.
- Keep that budget going once you move, too. The top regret for millennial homebuyers is unexpected maintenance costs, so you’ll want to be ready to cover whatever issues inevitably crop up.
