February 11th, 2016 4:03 PM by Michele Morse Reen
In 2015, millennials surpassed baby boomers as the largest generation population wise. In fact, more than one-third of America’s workforce are millennials. The expanding population makes millennials, widely accepted at those born between 1980 and 2000, a generation that is entering the real estate market and is here to stay. The characteristics of millennials and their outlook on home ownership, purchasing habits and the world in general are much different than baby boomers.
Let’s start with transportation. Public transit is something millennials are comfortable with and use frequently. A study by the National Association of Realtors and Portland State University found that millennials are more likely to have used public transit in the last 30 days than any other age group. You may assume that this is simply a result of median income, but millennials also prefer to live in attached housing and like to have shopping and restaurants within walking distance, coupled with short commutes to work. While public transit and connected communities are part of the preferences for millennials buyers, they will put good school districts above all else. According to a survey by realtor.com, millennials are “less likely than other generations to compromise on school districts when in house-hunting mode.”
Millennials are already entering the home ownership realm, but research points to 2020 as the year that they have subtly targeted. An Urban Land Institute survey found that 70 percent of millennials who aren’t currently home owners have a personal goal to purchase by 2020. So what will they want when they decide to purchase? A big house. According to the National Association of Home Builders, millennial first-time home buyers prefer 2,375 square feet (four bedrooms) while baby boomers desired 1,879 square feet.
And how will they shop for it? Not at an open house. The 2015 National Association of Realtors Home Buyer and Seller Generational Trends study, found that Generation X relied on open houses while millennials relied on real estate agents, mobile device applications and search engines on the Internet.
The purchasing habits of millennials will change as they begin to earn more and become parents. While they are an independent generation they accept assistance with large purchases like homes, relying on real estate agents and brokers heavily.
If you are a millennial ready to buy this year, make sure to contact us. Our mortgage team members will help you with any questions you may have related to a loan. We understand you're making a commitment in purchasing a home, refinancing a mortgage, or tapping into your home equity. So we make a promise to you: We will help you qualify, apply and be approved for the ideal mortgage loan for you.
Give us a call at 408.626.1879.