What Investors Should Know about the Millennial Housing Market
According to the United States Census Bureau report of April 2021, millennials constitute the largest
age group with about 75.4 million out of the total US population of 331,449,281. Millennials are
those born between 1982 and 2000.
Presently they are between 21 and 39 years old. At this age, they constitute the most physically
active group of people. Since they are at the starting or middle point of their careers, they are
making life-changing decisions at this stage.
In the past, people saw millennials as a group of people that preferred renting homes instead of
buying them. That was due to several factors, including high student loans or delays in starting
families and having children. But after settling their debts, marrying, or having children, millennials
have become more concerned with homeownership.
It is evident as they make up the highest number of homeowners in the United States at 42%. The
statistic above is only from older millennials. With more financial stability from younger millennials,
this percentage will likely surge.
It is also essential to know that millennials constitute 50% of renters. That shows the effect this
group of people has on the housing market. As an investor, you need to understand the pattern and
trends of this set of people. Doing so will help you invest wisely and earn more returns. Below are
some things you should know about the millennial housing market.
1. Millennials want affordable houses close to work
Millennials prefer living close to their workplace. A survey shows that 74% of millennials will choose
a convenient neighborhood close to their workplace. About 44% of millennials believe that
transportation cost from home to their workplace is essential. However, 58% of millennials said that
the home's affordability is vital.
Among millennial homeowners, 47% prefer to own houses in suburban neighborhoods instead of
rural areas or cities.
2. Millennials love neighborhoods with strong communities
Millennials prefer to live in neighborhoods with a strong sense of community. They crave more
human interaction. Either as homebuyers or renters, millennials want locations with amenities,
entertainment hubs, dining, decent public spaces, etc. Crime rates and local school ratings are also
essential when millennials choose a neighborhood. That is because they buy homes intending to
reside there for a long time.
3. Communication with realtors
Surveys show that millennials prefer to communicate with real estate agents through direct
messages. They ask questions, express interest, and schedule appointments through messages.
Millennials will only make phone calls when the situation requires urgent attention.
According to the National Association of Realtors (NAR), real estate agents are now adapting to this
mode of communication. Surveys show that about 34% of agents chat with clients via instant
messaging. Though 94% of real estate agents still use email, 90% also communicate through text
messages.
4. Tech-oriented house hunting
Millennials are highly tech-oriented. As a result, technology plays a vital role in their house hunting.
An NRA survey shows that 99% of millennials go online to obtain general information about home
buying and the housing market. About 39% of millennials feel comfortable buying a home online.
Another 59% of millennials are somewhat okay with making an offer after a virtual tour of the
property.
According to the 2021 report by Zillow, over 80% of millennials will prefer a 3D virtual tour of the
home when house-hunting. Millennials want live streaming and videos instead of the usual pictures.
For that reason, agents now engage in virtual staging during the online marketing process.
5. Eco-friendly or sustainable environments
Millennials put much value in sustainability. They opt for environmentally conscious locations and
green homes. Millennials will prefer homes with features to lower energy consumption. In addition,
they do not mind the extra cost of installing solar devices in their home. Investors that want to
attract millennials should consider installing eco-friendly features on the property.
6. Smart homes
As millennials are tech-savvy, they are attracted to smart homes. They want to enjoy the ease of
accessing every system in their home through one device. Doing so will help them monitor the
property and control energy costs. If the home does not have smart features pre-installed, the
options for future upgrades should exist. As an investor, it would be best to consider these smart
homes.
7. High-income earners
Present millennials are high-income earners. They gain more income than the older generation
during their time. Although millennials may be first-time homebuyers, they can spend more on
luxury homes. Even as first-time buyers, surveys show that present millennials prefer deluxe homes.
Bottom line: What Investors Should Know about the Millennial Housing Market
Since millennials are currently the largest age group in the country, their choices affect the housing
market. Savvy investors need to adapt to the demands of millennials to create a sustainable
environment and incorporate technology during the home buying process.
