Unraveling Millennial Homebuying Trends: A New Era in Real Estate
In recent years, the real estate landscape has dramatically shifted with the revolutionary influence of the millennial generation. Millennials are known for disrupting different sectors of the economy and the housing market is no exception. As a result, their unique behaviors and preferences are shaping up the marketplace, making it necessary for everyone in the industry to understand and evolve according to these changing trends.
Millennials, broadly defined as those born between 1981 and 1996, are now becoming a significant proportion of homebuyers, greatly affecting the housing industry and how homes are bought and sold.
Millennials and Technology
First and foremost, technology stands at the heart of the millennial home buying process. Raised in the digital era, millennials are turning to online platforms for their home search. According to a study by the National Association of Realtors, 81% of older millennials found their home through a mobile app.
Millennials value efficiency and transparency, and they will more than likely begin their real estate journey digitally. Real estate agents and sellers are now tasked with streamlining the home-buying journey to accommodate this digital preference, for everything from home searches to virtual tours and e-closings.
Urban or Suburban?
In contradiction to the prevailing stereotype that millennials favor urban life, many are seeking homes in the suburbs. The 2020 Home Buyers and Sellers Generational Trends report by the National Association of Realtors reveals that 52% of millennial homebuyers are opting for homes in the suburbs, while just 14% are purchasing homes in urban areas.
The reason behind this could be the quest for affordability, larger living spaces, better school districts, and a closer sense of community. The onset of remote work due to the Covid-19 pandemic may also be a contributing factor.
Affordability Challenges
Despite being the largest cohort of homebuyers, millennials also confront significant financial hindrances, posed largely by student debt and increasing home prices. A CNBC survey found that only 33% of millennials own property, and of those that don’t, majority quote student debts as a universal cause.
Responding to these affordability challenges, many millennials are open to alternative home-buying methods, such as purchasing fixer-uppers, choosing smaller urban properties, or even sharing homes with roommates.
Environmentally Conscious Choices
Another defining trait of millennial homebuyers is their concern for the environment and sustainability. They gravitate towards homes that are energy efficient, embrace "green" technology, or minimize their carbon footprint. Real estate professionals would do well to highlight such features prominently when dealing with millennial clients.
In the journey to understand millennials as home buyers, industry professionals must be adaptable and tech-savvy, recognize the preferences for affordability and space, and appreciate the value placed on sustainability. The real estate market must pivot to these new trends to keep pace with the millennial revolution, and align their strategies to fit the largest cohort of today's homebuyers.
