Coming of age in the recession has painted a different homebuying picture for the Millennial generation. With surmounting student debt and rent prices, the real estate market was once asking, “Where are the Millennials?” But according to a new study performed by Zillow the Millennials are making their own waves in the housing market with their new approaches to shopping, financing and purchasing.
Millennials make up the largest generational percentage of homebuyers.
Nearly half of today’s homebuyers are under the age of 35. Sixty percent of first-time homebuyers in 2016 have been Millennials.
Millennials are more likely to skip over the traditional “starter home”.
Most Millennials have delayed other traditional milestones that commonly precede homebuying (i.e. marriage, having children, etc.), meaning they’re often renting further into adulthood. This may be why Millennials are surpassing the traditional “starter home”. The median Millennial home purchase is 1,800 square feet and their median home price is $217,000, which is more than what Baby Boomers are spending and only 11 percent less than Generation X home purchases.
Younger homebuyers are more likely to consider newly built homes and townhouses.
50 percent of Millennials considered purchasing a newly built home and 21 percent considered purchasing a townhome or condo.
Move-in ready homes are a top-priority for Millennial homebuyers.
Younger buyers are more likely to request a seller to complete repairs on the home they are purchasing. Six in 10 Millennial buyers asked their sellers to make major repairs.
Millennials aren’t as “urban-focused” as you’d think.
While Millennials place a good deal of importance on being close to urban necessities and entertainment, the amount of Millennials who have moved to the suburbs has increased. Just one quarter of Millennial homeowners live in an urban area.
Millennials are the most likely generation to exceed their initial homebuying budget.
Thirty-seven percent of Millennials went north of their initial home budget, in comparison to the 33 percent average. First-time homebuyers are 13 percent more likely to exceed their budget than repeat purchasers.
Millennials “shop” for real estate agents differently.
Though this younger generation has the lowest percentage of buyers using a real estate agent (70 percent), Millennials enlist agents earlier on in the process than other generations.
They’re also spending more time scrutinizing their agent choice online by reading online reviews (61%) and delving into an agent’s past sales data (57%). Nearly as many Millennials find their agent online (29%) as they do from a referral (31%).
Many Millennials and first-time homebuyers rely on gift funds for a down payment.
Saving for a down payment is a substantial Millennial homebuying hurdle, which is why many are relying on friends and family members or down payment assistance programs for help. Twenty-one percent of Millennial buyers used a gift from a family member or friend as a source of down payment. One in four first-time homebuyers also received a financial gift for a down payment.