Infographics: Millennials Buying New Homes, Good for CMs?
Originally published by: Zillow — October 18, 2016
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The home buying experience is both an intimidating financial transaction and an emotional milestone. Half of home buyers in the U.S. are under 36, meaning a new generation—Millennials—is shaping the future of real estate. Despite demographic reports about young adults’ urban lifestyles, Millennials share their parents’ aspirations for a single-family home, often in the suburbs.
The process of finding or selling a home is much more collaborative for Millennials than for older generations. They bring all available tools to the process, including their smartphones, social media and online networks. While older generations rely on real estate agents for information and expertise, Millennials expect real estate agents to become trusted advisers and strategic partners.
Millennial home buyers are also diverse. While only 9 percent of all homeowners are Hispanic, nearly 15 percent of the Millennials buying homes are Hispanic—reflecting the changing demographics of the American middle class.
Homeownership remains a vehicle for wealth in the U.S., but it can also be a financial burden, as families stretch their finances to afford the space they need, and large, dated homes owned by Baby Boomers and the Silent Generation demand maintenance and improvements.
- Half (50 percent) of today’s home buyers are under the age of 36, and 47 percent are first-time buyers. Solo home buyers are in the minority; most buyers are shopping with a spouse or partner (73 percent).
- Eighty-three percent of buyers are shopping for a single-family house. Their top considerations are affordability and being in a safe neighborhood.
- Fifty-two percent of buyers consider renting while they’re shopping for a home—a number that’s even higher among younger buyers.
- Seventy-five percent of buyers hire a real estate agent during the buying process.
- Across all generations, almost nine out of 10 buyers (87 percent) use an online resource at some point in their search for a home to buy.
- Millennial home buyers share many concerns and preferences with their grandparents’ generation, both choosing homes with shared community amenities and considering townhouses at higher rates than those ages 35-49. However, Millennials’ home-buying process is significantly different from their grandparents’ process.
- Millennial home buyers wait longer to buy a first home than previous generations.i The modern-day “starter home” is nearly as large as the median home for “move-up” buyers, and costs about 18 percent less.
- Millennial home buyers undertake far more social home searches, seeking input from friends, relatives and neighbors 58 percent of the time, versus the Silent Generation, who poll friends just 37 percent of the time.
- More than a quarter (26 percent) of buyers find an agent online. A third (33 percent) find an agent through a personal referral.
- Millennials scrutinize more agents, asking friends and family about their experiences with agents and reading online reviews more than other generations.
- When it comes to choosing an agent, Millennials and other generations share their top priority: a sense that an agent is trustworthy and responsive to their needs.
- The average shopper goes on seven home tours, and while they may incorporate online research, they tend to be hands-on at decision time, preferring to meet an agent in person or talk on the phone, and prioritizing private tours of homes led by a professional.
- Only 46 percent of buyers get the first home on which they make an offer, reflecting the reality that in today’s tight market, the search—which takes an average of 4.2 months—comes with competition and disappointment.
- Over half of buyers (56 percent) save up for a down payment by setting aside a little money at a time. Almost a third (32 percent) use more than one source for their down payment, including gifts and loans from family, selling stocks and bonds, and cashing in retirement savings.