Real estate plans are changing for the next generation of American homebuyers
May 28, 2015
Popular rhetoric describes millennials as a generation starkly different from those previous – preferring urban apartment rentals over suburban homeownership, walking-distance to local coffee shops over driving to Starbucks, delayed marriage and childbirth, and digital interaction over face to face encounters. Differences in lifestyle choices and spending habits appear to be influenced by the larger economy rather than a radically different social mindset though, and as millennials grow up, we are seeing that they too are interested in buying homes.
According to Trulia, 72% of adults ages 18 to 34 consider owning a home a large part of their personal dream, and 93% plan on one day owning a home of their own. Recent research from Zillow shows that young adult homeownership rates have actually been in decline for the past four decades – it’s not a trend started by millennials. It may be due to later marriages and childbirths rather than the storied paradigm shift in young adult desires causing the influx of residents to move into the cities, meaning as millennials, a generation larger than even the baby boomers, grow up and start having families of their own, those same millennials could start desiring a yard and safe neighborhood. As noted by Goldman Sachs, this “could lead to a surge in home sales.”
Perhaps more surprisingly, millennials look more traditional in where they’d prefer to buy a house once settled down than generations prior – the suburbs. Young millennial urbanites may be famous for stubbornly rejecting the suburbs and shooting up prices in gentrifying urban neighborhoods, but Mollie Carmichael, principle at John Burns Real Estate Consulting, observes that this happens more often when millennials are “not married and they’re renting.” Once married, with children, or looking to own a home of their own, “they want suburban, they want single-family detached, they want a yard.”
What this all means is that millennials, despite what might be said about the generation, may actually be just like those who came before them – they want the house and a safe, good neighborhood where they can raise their family. They want the yard and the parks and the swimming pools, but not yet – it comes after marriage and after children, and until then they, just like their parents before them, want to experience the city.
Angel Oak Focus on Millennials Series
As millennials come of age and begin looking to buy homes for the first time, they are confronted with intricacies in the mortgage process that didn’t even exist when their parents first bought their own homes. As the housing market heats up again and millennials find age-old home buying guides irrelevant, Angel Oak Home Loans seeks to guide prospective homebuyers in navigating the complex world of mortgages through this series, focusing on educating the first time home buyers to make it an easy and simple process.