Each generation bears its own unique characteristics. For the millennial generation (those born between 1978 and 1995), homeownership is a top priority. But college debt and uncertain job prospects mean that they often have to move back in with their parents first. Here are 11 insights to help you get to know this market better.
Each demographic generation bears its own unique characteristics. The millennial generation is no different. According to a 2018 Bank of America survey, 72 percent of millennials consider homeownership to be a top priority.
The only financially meaningful life event that ranked higher was preparing for retirement, at 80 percent. Having children and marriage fell lower on the list, at 44 percent and 50 percent, respectively.
To the millennial generation (those born between 1978 and 1995) owning a home is not only a wise investment option — it is a fundamental value intrinsic to the American dream.
Millennials are waiting longer to buy, but they’re thinking long-term
1. Homeownership might be delayed
Millennials are waiting longer to buy likely because of what they saw their parents experience in the 2008 real estate market crash.
What is inspiring to many millennials is the historically low interest rates. But with student loan debt at all time highs, it is not uncommon for millennials to move back in with their parents after college to save money and pay off part of their debt.
Pro tip: Many millennials will look to move out of their rental or parent’s house the minute they find a steady full-time job.
When someone announces their “new career,” it’s a good time to congratulate them and let them know you can help them find a great house with their newfound success.
2. Jobs might be delayed as well
Securing full-time jobs and a steady paycheck is not guaranteed upon graduation, and this is another reason many millennials will opt to move back in with their parents.
The median age of millennial homebuyers is 29, which is older than prior generations. This rise in the age of the millennial homebuyer is also in line with the rise in average age of marriage.
Pro tip: Target buyers in their late 20s with first-time homebuyer value propositions.
3. The American dream is still alive
Of all millennial homebuyers, 79 percent believe buying a home is still the hallmark of the American dream. Most will purchase a home for the first time and will need some extra hand-holding throughout the process.
This is why one of the most important steps for millennial homebuyers is to make sure they are working with a top, trustworthy agent who can help guide them through the process.
Pro tip: Helping millennials navigate the homebuying process and providing real value will establish you in their eyes as an agent they can count on.
4. Despite what might seem like a lack of commitment, millennials want a long-term home
What might come as a bit of a surprise, millennials are looking for long-term homeownership. Often millennials are seen as “flaky” or “noncommittal” due to their tendency of changing jobs more frequently or getting married later on in life.
This is not the case when it comes to their intentions with homeownership. It’s important to remember that they intend to own for quite some time.
Some millennial buyers will even have the intention to purchase so that one day they can rent out to other folks. Some millennials will even purchase homes with the intent of renting rooms to friends.
Pro tip: Millennials are going to buy and sell homes throughout their lives. Look for big life events, such as marriage, children or job changes which may trigger housing need changes as well.
Millennials embrace mobile tech, and they embrace value — they don’t mind fixer-uppers
5. They are willing to expend a little elbow grease
Contrary to popular belief, millennials embrace the fixer-upper even though they likely have not been through the process of fixing up a home before.
Most millennials will actually prefer to spend less on a home and fix it up themselves, knowing they can create their own vision as well as build equity in their house by recreating the space.
Two out of every three millennials are willing to put an offer on a home that may need a partial or complete home renovation, according to the Bank of America survey.
Pro tip: Offer contractors ahead of time, and help millennial buyers focus on what really matters like location and value.
6. Millennials are using their phones for everything — except long conversations
When working with millennials you will want to find ways of ensuring you’re on the same page they are — and this means mobile. Not only are they searching on their phone, you can pretty much guarantee their preferred method of communication is text message, social media or an email.
Although many millennials appreciate phone calls, they are a bit more hesitant about getting wrapped up in a long phone conversation.
Pro tip: Get acculturated to mobile technology, just like the millennial buyers. Know your audience, and understand that millennials would prefer texting over phone calls.
7. They do their research
Millennials are researchers. With so much access to information here in 2019, you can be sure millennials are googling everything!
Sometimes they will even surprise me with how much they already know (which can also be dangerous because there is some bad or outdated information online).
Whether it’s researching restaurants or the first step in buying a home, you can be sure the millennial you are working with is researching online. This is what makes online reviews so important. You can be sure they will look you up online to learn more about your reputation.
Pro tip: Give millennials added tools that they can use to conduct their research. They will love you for it.
8. Trust matters
Millennials want a trustworthy agent. Most millennials will want to conduct their home search themselves at their own pace, researching homes and neighborhoods without the help of an agent.
Once the time comes to pull the trigger, the millennial wants the input of an agent they can trust to help spot things they weren’t aware of. More than 90 percent of millennial buyers purchase their home through a real estate agent.
Millennials want their agent to help walk them through the steps involved with buying a home so that they can better understand all the steps of the process.
Pro tip: Be genuine, and speak your mind, even if you know it’s not what the millennial buyer wants to hear. They will appreciate and respect you for it, and this will establish you as an agent they can trust.
Millennials have a strong sense of community. Help them find their community
9. Single homeownership common
Marriage is on the decline. Marriage among millennials has become less popular, and those who are choosing to get married are doing so later in life.
Many millennials are buying homes with partners before they marry. The Pew Research Center estimates that 25 percent of millennials will never get married.
Pro tip: Don’t be afraid to target millennial buyers who are single — many are buying homes by themselves.
10. They know what they want and will be patient in finding it
Most millennials will take the leap from renting to buying or go directly from living with mom and dad to purchasing a home of their own.
On average, it will take a millennial eight weeks of searching before they purchase a home, which is less time than it took prior generations.
Pro tip: Stay patient, and know that many millennial buyers will take, on average, two months to buy a home. Some will take far longer as they love to do their research and make informed buying decisions.
11. Millennials seek a community
A strong sense of community is sought out by many millennials. While many believe millennials are “addicted” to their phones and aren’t interested in human engagement, this is far from the truth.
Many millennials are buying homes based on the community. They are looking for things to do and want to be a part of something. Whether it’s having common areas or a local cafe, millennials are looking for more than just a house.
Finding a home with community social events, outdoor dining options and convenient access to fun things to do will add bonus points for millennials.
Pro tip: Millennials love to be a part of something. Figuring out what interests they have and targeting homes near those interests will help snag their business.