Millennials are the largest buying force in the housing industry, according to the National Association of Realtors®‘ (NAR) newly released 2019 Home Buyers and Sellers Generational Report. This generation of buyers, between the ages of 21 and 38, account for 37 percent of all home purchases.
“The largest cohort in America is growing up and becoming more traditional in their buying habits,” the report notes.
Older millennials – those ages 29 to 38 – make up the largest share of married buyers, at 69 percent, and are the most likely to have children under the age of 18 living at home, at 58 percent. Their top motivating factors for purchasing include the desire to own their own home (42 percent), the desire for a larger home (15 percent), relocation for a job (9 percent), a change in familial status (7 percent), and the desire for a home in a better location (6 percent).
Older millennials have a median household income of $101,200, according to NAR’s report, and purchase homes with a median price of $274,000. That’s comparable to Gen Xers, who have a median income of $111,100 and purchase homes with a median price of $277,800, and younger baby boomers ($102,300 and $251,100, respectively).
“Older millennials are now entering the prime earning stages of their careers, and the size and costs of homes they purchase reflect this,” says NAR Chief Economist Lawrence Yun. “Their choices are falling more in line with their Gen X and boomer counterparts.”
Millennials are the generation most likely to make compromises on their home purchases, the report found. They also plan to stay in their homes for 10 years – a shorter time than Gen Xers, who plan to stay 16 or more years.
Millennials also rely on real estate agents when completing a home purchase, with younger millennials between the ages of 21 and 28 being more likely than any other age group (87 percent) to use an agent’s services. Some of the top benefits that millennials said real estate agents provide are:
- Help to understand the process (72 percent)
- Point out unnoticed features/faults with property (58 percent)
- Negotiate better sales contract terms (49 percent)
- Provide a better list of service providers, such as home inspectors (49 percent)
- Improve buyer’s knowledge of search areas (41 percent)
- Negotiate a better price (35 percent)
Millennials place high value on communication with their real estate agents. They value agents who personally inform them of all activities; send updates as soon as a property is listed, price changes and a warning if one goes under contract. They also like communication via text message or email, providing they address their specific needs.
Among features on agents’ websites, millennials found these to be most important: photos, detailed listing information, floor plans, information on recently sold properties and virtual tours. They found videos (23 percent) and real estate news or articles (8 percent) the least helpful, according to the report.
Additional millennial highlights from NAR’s report
- Commutes are a major factor in millennial real estate decisions. Commuting costs were also one of the top factors weighed when choosing which home to buy.
- They often have financial help. Buyers aged 38 and younger are the most likely to receive a gift from relatives or friends to help with their downpayment to purchase a home.
- One in five younger millennial buyers is unmarried, and the share of single first-time buyers is growing.
- They’re fleeing the nest. Thirty percent of younger millennials lived with their parents prior to buying their own home.
- They’re searching for affordability. One in five younger millennials purchased a home in rural areas, and 13 percent in small towns. Those figures are the same for younger baby boomers.
- They want to stay close to family. Younger millennials – just like baby boomers and those from the silent generation – are the most likely to say they want to be near friends or family when they buy a home.
Source: “2019 Home Buyers and Sellers Generational Trends Report,” National Association of REALTORS® (April 1, 2019)
© 2019 Florida Realtors®