How Millennials are Reshaping the Housing Market
Nov 28, 2016 | Market News
According to the latest housing trends report by Zillow, 50% of today’s homebuyers are 36 years old or younger. In addition, 47% are first-time buyers and 63% of people selling a home are doing so for the first time. With Millennials just beginning to enter the housing market, they are reshaping the market with their new approaches to shopping, financing, and purchasing their first homes.
New Trends for the Housing Market
Millennials are more likely to skip over a “starter home”
Because the younger generation is delaying the traditional milestone of getting married and starting a family, Millennials are renting apartments further into adulthood compared to Baby Boomers and other generations. The longer they wait to purchase their first home, the more money they can save up. That’s why many Millennials are skipping past the small starter homes that many first time homeowners used to purchase. The average home purchased by a Millennial is 1,800 square feet and costs around $217,000. This is more than what Baby Boomers are spending and only 11% less than what Generation X is spending.
Younger homebuyers would rather buy newly built, move-in ready homes and townhouses
The idea of a fixer upper isn’t appealing to most Millennials. About 50% of this generation considered buying a newly built home, while 21% considered purchasing a townhome or condo. In addition, about 6 for every 10 younger buyers asked the sellers to make any major repairs needed to the house before they agree to purchase the home.
Millennials find real estate agents different
With the internet at their disposal, younger generations are relying heavily on online reviews and past sales data to help them choose their real estate agent (if they even decide to use an agent). Millennials have the lowest percentage (70%) of buyers who rely on a real estate agent.
Younger homebuyers are the most likely generation to exceed their budget
On average, 33% of homebuyers pay more for their home than their initial budget. However, 37% of Millennials spent more money than their initial home budget.
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