One of the most influential groups of homebuyers on the market these days are Millennials. These large groups of buyers behave quite differently from other homebuyers according to “The American Housing Study.” Here is some insight on what sets them apart from other generations of homebuyers. Who are they? Millennials are the youngest generation of […]
One of the most influential groups of homebuyers on the market these days are Millennials. These large groups of buyers behave quite differently from other homebuyers according to “The American Housing Study.” Here is some insight on what sets them apart from other generations of homebuyers.
Millennials are the youngest generation of homebuyers and are born after 1977 and before the year 2000. They account for nearly 2.6 million of the homes sales in the United States over the previous two years. They account for nearly 25% of the population and this group is nearly 20% larger than Generation X. The largest demographic for Millennials are married with children, which accounts for 26%, followed by married without kids at 19% of the group. Single male homeowners account for 12% of the group while single females are 8%.
How do they buy?
Although millennials average nearly $8500 less annual income than other generations of buyers, that hasn’t stopped them from purchasing a home. Almost 12% of them have used unconventional financing, such as 5% down or 100% percent mortgages to secure their home. Nearly 61% reported using savings as their main source of down payment.
Why do they purchase?
The majority of millennials list establishing a household as their main reason to purchase a home. Other reasons they purchase are for financial reasons, namely to build equity and utilize the mortgage interest deduction on their taxes.
Why do millennials purchase differently?
Millennials do purchase homes quite differently than their older generations. Being an Internet generation, this group is used to things happening quickly and having information at their fingertips. As a result, they buy faster, the average Millennial will look at 2 less homes on average than older generational buyers. This is no doubt due to their ability to utilize information on homes on the Internet to speed along their decision making process. As a group they enjoy participating in your marketing via social media, and choose to align to brands with a cause or purpose.
Besides buying faster, millennials are 13% more likely than other groups to buy a home to be closer to their work, while 8% are more likely to buy based on the schools in the area, and 6% more likely to buy to be near friends and family.
Millennials are less likely to buy a new home but more likely to purchase a condominium than older generation buyers. This tech savvy group likely prefers having yard work, snow removal, and exterior maintenance handled by others so they can devote their time to their work lives, family, and their technology. As a group they typically choose smaller homes averaging less than 1,650 sq. ft. This can be attributed to affordability and the need for equity building starter homes.
As many Millennial buyers begin to enter the market, sellers and agents must become aware of their unique needs or risk alienating one of the largest and most powerful buyers in the market.