Millennials. Everyone has heard the term that categorizes those born in the early 1980s to the mid-1990s. At 92 million, they are the largest generation on record, according to the US Census Bureau, and are currently one of the top segments of those active in the housing market. Let's take a look at how Millennials will continue to shape the current housing sector.
More so than previous generations, millennials are slow going when it comes to moving and purchasing that first home. According to a study by the Pew Research Center, about one-in-six millennials have moved in the previous year which is significantly less than the quarter or so for earlier generations who had moved at the same age. Several factors for millennials’ reluctance to purchase their first home include the recent financial crisis in the US and a rise in student debt. Additionally, millennials are delaying or declining marriage and starting families later than previous generations, with just 46% of millennials married.
Advances in technology and the increasingly widespread use of the internet over the past few decades have led to a rise in remote job opportunities. This is great news for millennials as a recent survey done by YPulse reported that 55% of 20-38-year-olds plan to continue to work from home, even after COVID. Despite the initial uncertainty so many people faced when they switched to working from home, many have grown to prefer it. Those who said that working from home has been a difficult transition decreased to 28% in April of this year, compared to 36% in April of 2020.
For the housing market, this means that homebuyers no longer need to purchase in an area close to their jobs. Instead, they can choose to live just about anywhere. Places that offer larger homes for a lower price might become increasingly popular in the years to come.
When it comes to housing, millennials have made it clear that the quality of the home and the assets that it includes are more important than most other elements. For this generation, homes that promote a happy environment, a healthy lifestyle, and sustainable habits are coveted.
According to a study by Green Builder Media, older millennials are purchasing homes with a sale price of $300,000 - $400,000, while the median home sale price is $250,000, and younger millennials are purchasing homes closer to $200,000.
The National Association of Realtors found that millennials prefer single-family homes, and they would prefer new homes. They’re looking for open floor plans and minimalist designs, all aspects of a home not usually found in older homes. The typical home purchased by millennials was found to be less than 1,800 square feet with three bedrooms and two bathrooms. Large backyards and home gyms are important to millennials with 53% and 49%, respectively, preferring these options.
When it comes to how millennials want to obtain home financing, everything is online. From researching options to filling out an application, millennials are relying on the internet to achieve their goals. Millennials value the convenience of quick online communication, the convenience of online processes, and the ease of simple experiences made possible by digital tools. At Homestead, we value offering these kinds of experiences. That’s why we’ve invested in all the latest technology to make getting a mortgage as simple as possible. From our convenient mobile app where you can upload documents and chat with your Loan Originator, to our convenient online application, we take the stress out of home financing.
Are you a millennial looking to buy? Working with Homestead Funding means you can enjoy a simple, convenient mortgage process so you can focus on your dream home. Contact us today to learn more about how we can help you achieve your home financing goals.
Sources: Forbes, USA Today, Business Insider, Green Builder Media, Pew Research, YPulse
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