Happy August from Homes of Silicon Valley! As we maintain committed to helping you explore the most relevant and timely trends in real estate today, it would be impossible to talk about housing without mentioning millennials. Defined by the Pew Research Center as the generation born between 1981-1996, millennials make-up 25% of the US population. You’ve no doubt heard a wide variety of generalizations about what this demographic wants and needs as well as how their milestones differ from previous generations. So, this week, we took a little data dive into what impact millennials have on housing (hint: it’s BIG).
Just a few weeks ago, Forbes dedicated an entire article to millennial home buying trends. Notably, this piece revealed what we have witnessed for some time: “…the Millennial homeowner is not some one-in-a-billion, mythical unicorn. Under the right social and economic conditions, today’s twenty- and thirty-somethings are buying, particularly as they get married and start families.”
It’s no secret that economics and social trends (i.e. the cost of rent and student loans) have made the journey into home ownership challenging for millennials. Coupled with marrying and starting families later, much talk of the proverbial town became centered around the assumption that this generation was less motivated than those of the past with regard to home buying and would be unlikely to serve as the housing industry’s driving force.
However, the data reveals a different story. As you can see from the infographic below, millennials actually made up the largest share of home buyers in 2018 for the 5th consecutive year (above all other age groups). Plus, 44.9 million millennials will turn 34 in the next 10 years – the median age for home buying according to Zillow. The result is a potential of 7.4% more first-time home buyers than the last decade. While this does not negate the fact that the generational home ownership gap is real (32% of millennials own homes compared to 60% and 75% for Gen X and Baby Boomers respectively), the gap is expected to shrink significantly as millennials age. It’s an interesting trend to follow as retirement-ready Baby Boomers consider cashing in on their equity and downsizing or relocating - right when millennials are ready to make a move into the American Dream.
If you are a long-time homeowner thinking of selling, it’s worth considering what millennial home buyers want, what they are doing to achieve home ownership and how the agent you choose effectively reaches them.
If you are an enthusiastic potential millennial homeowner yourself, we would like to acknowledge that we know it is NOT easy – but we are here to extend our utmost support. We are equipped with not only the market expertise you want and deserve, but happy to connect you with resources such as lenders, tax and financial planning professionals and more to help you position yourself with confidence and empowerment. Trust us when we say our motivation to see you succeed is as genuine and deep-rooted as yours. (Mark remembers his FTHB days pretty well... and Sarah is on the journey herself!)
Resources Used & Further Reading:
Yes, Millennials Really Are Buying Homes. Here’s How
What Millennial and Baby Boomer Homebuyers Disagree on Most
Who Are Millennials
New Chase Study Finds That the Majority of First-time Millennial Homebuyers Feel Financially Ready, Excited to Purchase a Home
All our best,
Mark Barber (CALBRE # 01220031) &
Sarah Healy (CALBRE # 02061586)