Millennial homebuyers are propelling the housing market as they age, comprising a segment of buyers that reflects a racially diverse middle class, according to Zillow Group’s recently released report on Consumer Housing Trends.
Forty-seven percent of people buying a home and 63 percent of those selling a home are doing so for the first time, the report reveals. These new buyers, sellers, and homeowners have old-fashioned aspirations, seeking a home that is both a good investment and a reflection of themselves—and, they instinctively turn to internet research and social networks on and offline, approaching homeownership with both savviness and caution.
“We knew the millennial generation was playing an increasingly large role in the housing market,” says Zillow Chief Economist Dr. Svenja Gudell, “but this consumer research allows us to get a fascinating, behind-the-scenes look at how their expectations and approach are playing out in the housing market. These young adults came of age during a recession, but they are buying their first homes in a high-priced and fast-paced market. They’re using every available resource, including online research and real estate professionals, and taking on the challenge with gusto.”
Key findings from the report include:
- While shopping for a home, 52 percent of buyers say they also considered renting, and only 46 percent of buyers got the first home on which they made an offer, demonstrating that in today’s fast-moving market, disappointment and competition are now part of the process.
- While 56 percent of buyers save up for a down payment a little at a time, 32 percent find savings are not enough and rely on other sources, such as gifts, loans, and cashing in their retirement savings.
- Millennials, who will define the future of real estate, include their social networks in their real estate transactions and expect their real estate agents to help with more than logistics, looking to them for strategic advice and remodeling ideas.
- First-time buyers rent longer than previous generations. When they do buy, they typically spend just as much as baby boomers on a home that is only slightly smaller than homes purchased by repeat buyers.
- It’s not just millennials who are shopping online for real estate. Nine out of 10 buyers and sellers under 65 depend on both real estate agents and online sites and apps.
- Most Americans (83 percent) want a single-family home, and more than half (52 percent) live in the suburbs. Of home-owning millennials, 47 percent live in the suburbs.
- Renters are disproportionately women and people-of-color, and most make less than $50,000 a year. Their top concerns are budget, safety, and finding a home that allows pets.
“Young homebuyers and sellers share their grandparents’ romantic notions about homeownership, and we’re finally seeing their home-buying dreams come true in the data,” says Jeremy Wacksman, Zillow Group chief marketing officer. “These savvy consumers are doing things differently: they juggle shopping for homes to buy and rent at the same time, and they bring deep research and their vast social networks to the process.”
For more information, visit www.zillow.com.
