Reposted with permission from ValueInsured.
Many industries have been betting heavily on Millennials as their movers and shakers. Want box-office successes? Make a blockbuster Millennials would want to watch. Marketing electronics, cars, sodas, or vacation experiences? Make sure they appeal to Millennials, the largest generation in U.S. history and the lead consumers and influencers for seemingly all things. But how about housing? Nope – at least not yet.
It has been over-analyzed why many 30-something Millennials have not bought their first home yet. Commonly cited factors include delay of marriage and parenthood, high college debts, and other economic and cultural reasons. But in the past six months, we have seen report after report on Millennials’ increasing influence in the U.S. housing market. Some predicted housing in 2017 could be the year of the Millennials. NAR predicted Millennials would drive U.S. housing in the next decade.
It makes sense, of course. Historically, 20- and 30-somethings in our population have been the most important segments that drove home sales growth. Millennials may be doing it a little later than the previous generations, but the desire to own home is still there. 83% of them in ValueInsured’s latest quarterly Modern Homebuyer Survey said owning a home is an important part of their personal American Dream. According to a latest Qualtrics survey, 88% of Millennials who do not own a home have one on their wish list.
Forecasts on their massive influence aside, is the housing industry ready for this next generation of homebuyers? Just as Millennials are different moviegoers than their parents, they will be different homebuyers. One of the starkest differences: Millennials shop for their homes differently.
According to the National Association of Realtors, 99% of Millennials search online when shopping for a home. They are twice as likely as their parents’ generation to use a mobile device to look for a home. In fact, nearly 6 in 10 Millennials (58%) reported having first found the home they eventually bought on a mobile device.
Millennials also live and plan to own their homes differently than their parents. The average Millennial job tenure is 2.8 years. They make up 43% of all movers. But, many young people have moved throughout history. Do Millennials plan to settle down once they buy a home?
One can expect they should, but they aren’t likely to own the same home for 30+ years as many in their previous generations do. According to the ValueInsured Survey, while “owning my own home” remains – just like for their parents – the top personal definition of the American Dream for Millennials, two other popular answers are “having the freedom to pursue opportunities wherever they are” and “being able to move and live wherever I want”.
Other latest findings that indicate Millennials may be a generation on the move include:
- 68% Millennials say their American Dream is to be able to pick up and move whenever and wherever they want;
- 80% say their American Dream is to own a home on their own terms while staying agile and mobile;
- 82% say they plan to move in under 5 years;
- 71% expect they will own 2 or more homes in their future;
- 67% worry about the risks of buying a home due to a potential job loss or job move;
In fact, 17% of all Millennials surveyed expect they will own 4 or more homes in their lifetime. Economics aside, one of the reasons Millennials have delayed homeownership is their desire to stay mobile and have higher level of flexibility, despite having to pay the price of high rents for it. Just as movie studios and cell phone companies that cater to Millennials’ need for mobility can continue to stay competitive, same is true for the housing industry.
Mortgage lenders, real estate brokers and builders who can offer the stability and financial rewards of homeownership, plus the flexibility Millennials have become accustomed to in renting, will be able to differentiate themselves in winning over this future largest segment of the housing prize.