The large millennial population is in prime first-time home-buying age, driving demand and competing for the ongoing scarcity of homes for sale. While there are some divergences in how millennials approach home buying and selling, it’s still an open question about how radically this generation will change the housing market.
Millennials are different from prior generations in important ways that impact home buying. They’re getting married and having children later (if at all), and they’re more likely to live with their parents, even into their 30s. As the traditional milestones associated with homebuying are pushed back, the typical age of a first-time buyer has increased.
While homeownership is still a goal for most millennials, affordability is a major driver of when, where and how they’re buying a home. An increasing number of millennials are saying they don’t think it will be possible to own a home. Many are looking for flexible homeownership opportunities—including rent-to-own, shared living arrangements and multigenerational living—to make homeownership possible.
The first generation to grow up with so much information available to them, millennials want to use data to make decisions. In general, they willingly share data about themselves and have become accustomed to highly personalized marketing.
In addition, millennials want to work with people who use technology, and are interested in optimizing technology to make the home-buying and -selling processes more streamlined.
It goes without saying that most millennials—and most homebuyers generally—start looking for a home on the internet. Compared to older generations, millennials are more likely to say they would buy a home online without first physically seeing the property. However, it’s important to remember that what people say is often different than what they actually do. So far we haven’t seen a surge in point-and-click homebuying.
At the end of the day, millennials buy and sell homes in much the same way prior generations have—and, in fact, they may value personal relationships even more highly. Whether it’s because they’ve relied on their parents for longer, or because they’re living in a more uncertain economy and housing market, research shows that millennials want guidance and advice during the process. They may be more comfortable with technology; however, the vast majority of younger buyers use a real estate agent or broker, according to the National Association of REALTORS®’ Profile of Home Buyers and Sellers. Younger buyers say they highly value the negotiation skills, relationships and market knowledge offered by a real estate professional.
Buying a home is an infrequent, complicated and often emotionally charged process. It’s usually the biggest financial decision anyone will make. More than that, however, it’s a decision about where an individual or family will spend their lives and make their memories. So, while we’re in an era of swift-moving technological advances, there’s evidence that even the savviest generation sees technology as an enhancement to the current process, rather than a replacement.
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