According to the U.S. Census Bureau, 83.1 million Americans belong to the Millennial generation, or those born about 1982 or after — or, Realtytoday.com explains, that’s more than 25% of the U.S. population.
As Millennials graduate from college and move along in the workforce, they are rapidly becoming the largest consumer group in America. Because of this, the real estate industry is flocking to appeal to this generation in the hopes of converting them into a generation of house buyers.
But as Millennials have shown and continue to demonstrate, they are nothing like the baby boomer generation that preceded them. Millennials have seen a great deal of changes, far more than other generations. They have grown up in the wake of a technological boom and have extremely different priorities and buying habits compared to earlier generations — not to mention limited credit and astronomical student loan debt.
And while many a real estate industry expert has been predicting the boom of the Millennial housing market, Mortgage Professional America writer Donald Horne doesn’t expect any grand shift to happen anytime soon.
Millennials are predicted to make up the largest share of home buyers in the coming year, this data reflects the buying tendencies of every group of individuals between the ages of 25 and 34.
But this does not mean that all Millennials are flocking to buy real estate of their own. Rather, it’s the individuals of the generation who are making enough money to buy instead of rent — which Horne insists, aren’t many.
Horne writes, “Homeownership is a better deal, but only for those millennials doing well enough to take advantage of it. The rest of the age group can look forward to rising rents.”
Horne noted that Millennials who are buying homes are also skipping the idea of a traditional, entry-level home and moving into what the industry calls move-up homes instead.
This changes the game for real estate agents, who would have normally suggested a low-cost mortgage plan such as an FHA 203k loan, which wraps mortgage costs with renovation costs, resulting in down-payments as low as 3.5%.
But instead of approaching the Millennials like they would other generations, Realtors are taking more specialized approaches, working hard to speak to the ideals of younger adults.
“To engage this group, we must understand their lifestyles, attitudes and the unique challenges that they face,” Mike Hardwick, president of Churchill Mortgage, said in an interview with Mortgage Professional America.