Millennials sometimes get a bad rap. The generation born roughly between 1982 and 2005 has been called everything from ‘lazy’ to ‘entitled.’ Some say they never grow up or move out of their parents’ basements and blame them for the lack of a strong housing recovery. Numbering 86 million members—the largest generation so far—millennials are an easy target. The fact is, millennials are growing up. The oldest are now in their 30s and are poised to enter the real estate market in a big way. Here are three facts about millennials that I find to be widely misunderstood.
1. Millennials are not sitting out the housing recovery. It’s true this generation is marrying and starting families later than previous generations. Millennials are also dealing with higher college loan debts and tighter credit requirements. These factors all contribute to a lower level of new household formation as compared to the baby boomers and Gen Xers at the same stage of their lives. But when you crunch the numbers and remove these factors, millennials as homeowners are actually exceeding expectations.
2. Millennials aspire to homeownership. They may disregard the status symbols of the past, such as watches and automobiles, but not homeownership. According to research by the National Association of REALTORS®, 87 percent of millennials view homeownership as a good financial investment, a higher percentage than other generations. Tight credit and student loan debt might be keeping millennials in rental properties longer than expected, but the majority see homeownership as an ultimate goal.
3. Millennials are buying homes in the suburbs, too. While commuting costs and an active urban lifestyle are frequently mentioned as keeping millennials concentrated in large urban areas, data from the U.S. Census shows that this generation is actually growing fastest in smaller, second- or third-tier markets as well as in the suburbs. Colorado Springs, San Antonio and the suburbs north of Boston all experienced the strongest millennial growth in 2013. And by delaying creating families, millennials are just on the verge of parenthood. As these new families grow, they will most likely follow the path of previous parents and relocate to the suburbs for better schools and larger homes.
Millennials are poised to enter the housing market full steam over the next few years. They’re already the largest share of homebuyers by age. How can you prepare your agents and your firm to best serve their needs?
- Millennials are new to homeownership. While they’ve done their
research online, they still look to
REALTORS® to explain the process and offer good advice.
- Millennials will look for agents who are comfortable communicating by text and email instead of personal calls. Make sure your agents are up-to-date on the appropriate technology.
- Student loan debt, tighter financing requirements and new careers all make “value” a key component of a successful purchase. Keep on top of the latest financing trends and options in your market that will allow millennials to buy.
Is your office ready? Now’s the time to look to the ABR® designation. It offers a variety of continuing education resources, such as the Generation Buy elective course, industry-related webinars and marketing tools to help agents stay on top of the latest real estate trends. Learn more about the benefits of earning the ABR® designation by visiting REBAC.net.
Marc Gould is vice president, Business Specialties, for the National Association of REALTORS® and executive director of REBAC. A wholly-owned subsidiary of the National Association of REALTORS® (NAR), The Real Estate Buyer’s Agent Council (REBAC) is the world’s largest association of real estate professionals focusing specifically on representing the real estate buyer. With more than 30,000 active members, REBAC awards the Accredited Buyer’s Representative (ABR®) designation to REALTORS® who work directly with buyer-clients. To learn more, visit www.REBAC.net.