The Rise of the Millennial Home Buyer

As millennials approach ages of financial stability, many are finally moving into the housing market and, in the past year, they have become the largest share of home buyers in America. How will the rise of the millennial home buyer change the housing market, and what trends should we be looking for in the future as more and more millennials become first time home buyers?

The Renter Generation Begins to Enter the Housing Market

Millennials—adults born between 1981 and 1996—now make up 38% of home buyers in the United States. This past year presented a large shift in the home buying demographic with 86% of younger millennials (22-29) and 52% of older millennials (30-39) becoming first time homebuyers in 2020 and 2021.

With millennials becoming a larger slice of the housing market, it is natural that their preferences will begin to impact trends across the country.

Millennials Are Buying Big

Contrary to past generations who chose to start small with their first homes, many wealthy millennials are going big with their first home purchase with many multimillion-dollar luxury homes being bought by millennials.                 

Millennials on tighter budgets are still prioritizing square footage when home buying. With many people still working from home due to Covid-19, Millennials are looking for properties that offer space for a home office, large yards with outdoor patios, and room for storage.

Where Are They Buying?

A report by Sotheby’s shows that, while Baby Boomers flock to sunnier locales (think Florida and Arizona), millennials are choosing to buy larger homes in more affordable cities such as Colorado and Austin. This is partly possible because of the rising trend of remote work, allowing millennials to choose where they want to live rather than having to move to where the jobs are.

Millennials Value High-Tech, Sustainable Housing

Millennials also value different things in homes, starting trends that will begin to shape the housing market in the future.

When searching for homes, millennials are looking to move to areas that can offer easy walkability, access to nature and parks, and vibrant food and art scenes that are easier to find in cities rather than suburbs.

Millennials Expect a Digital Buying Process

Millennials are one of the first generations to grow up with the internet and that means they expect the home shopping experience to live mostly online. With resources like Redfin and Zillow, home buying research is mostly done virtually. In fact, 99% of millennials start their home search online and 58% actually found their current home on a mobile device.

And it does not stop with research. Most millennials also prefer the entire home buying process be paperless and mostly digital with minimal face to face meetings. Many home mortgage platforms have gone fully digital or are rolling out digital mortgage options to help consumers in this way.

Along with that, millennials are also looking for new features in homes like smart home devices, EV chargers, solar panels, and more.

Though millennials typically wait longer than previous generations when deciding to buy a house, that time is coming quickly. More millennials are choosing to purchase homes and the number will only grow as the world steadies post-COVID. It seems the housing market will continue to adapt to changing demand and tastes that come with the millennial home buying movement.

To learn more about the home buying process, schedule an appointment with a residential real estate attorney at Lee Scott Perres, P.C.