Much has been said about the millennial generation turning away from the traditional suburban lives they grew up in. But if you’re wondering whether millennials are still buying houses, the short answer is yes. Millennials, people aged 25 through 39, have represented the largest share of the home buying market for the past five years. According to Realtor.com’s 2021 Home Buyers and Sellers Generational Trend Report, that trend is set to remain for the foreseable future.
While it may be true that millennials are renting for longer and buying homes later in life compared to their parents, the desire to own a home still remains. While it may look different than it once did, homeownership isn’t going away. Here are some interesting facts about what the millennial housing market looks like today.
What kinds of homes are millennials buying?
Quality over quantity is the millennial way. On average, a millennial home buyer believes a 1,700 square foot home is plenty of space, according to a Clever survey. Meanwhile, downsizing boomers are still looking for a home that’s 1,900 square feet.
This generation is more interested in minimalism than ever before. Ornate, sprawling homes that were once the gold standard have been pushed to the wayside for clean lines, open floor plans, and sleek design. As a whole, millennials have different priorities than their parents. They want to spend their money on wellness and experiences, rather than material goods.
Where are they buying?
For many, that means living closer to urban areas, or Hipsturbias, for greater walkability. And with city living comes higher costs and smaller spaces. Since millennials are waiting longer to buy homes, as a group they are skipping the “starter home.” The homes millennials are buying tend to be smaller, but higher-quality and new construction. Many aren’t interested in fixer-upper homes that require a lot of maintenance and upkeep.
How are they paying for it?
Homes are 39 percent more expensive than they were 40 years ago, while wages have remained almost stagnant. Millennials are spending larger portions of their incomes to afford the same kind of home their parents once had. The required 20 percent downpayment has long been a myth, but for millennials, smaller down payments are often the only way of achieving the goal of becoming a homeowner.
According to Clever, 70 percent of millennials say they plan to put down less than 20 percent on their next home, compared to 49 percent of baby boomers who plan on putting down more than 20 percent on their next home. Again, when millennials want to live in expensive metro areas with higher median home values, a 20 percent downpayment would be astronomical.
Despite some of these changes and challenges this generation is encountering, millennials still dream of being homeowners and are working towards achieving that goal. At Senné, we work with all kinds of home buyers and know how to meet the specific needs of each individual with a personalized home search experience. If you’re considering buying a home, reach out to one of our experienced agents today to start your search.
Visit us online at senneresidential.com or by phone at 617.314.9400.
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