Millennials wear many different hats: they’re avocado toast enthusiasts, social media aficionados, and, more recently, fiscally responsible homeowners? Really?
While it might come as a surprise to some, it seems that millennials are finally growing up and breaking into the U.S. housing market.
A recent survey by Clever Real Estate polled more than 1,000 Americans who indicated they were planning to buy a home within the next year. More than half of the respondents were classified as millennials (ages 18 to 34).
Interestingly, many of the report’s findings ran contrary to stereotypes about millennials within the real estate community. In short, millennials are poised to become the driving force in the U.S. housing market for the foreseeable future — here’s what you need to know.
Millennials Rely on Technology to Conduct Research and Find Homes
Millennials, renowned for their collective tech-savviness, are bringing those skills to bear in the home buying process. 63% of millennial respondents said their phone was their primary research tool, and 75% are relying on online listing sites like Zillow and Redfin to search for potential new homes.
Millennial Home Buyers Are Looking for Expert Guidance from Trustworthy Agents
Unsurprisingly, most millennials are first-time home buyers (78%) and, despite their utilization of technology for preliminary research, a majority choose to work with real estate agents to find and ultimately purchase properties (62%).
Those who choose to go it alone (38%) may not fully understand the value of working with an agent, or that sellers typically pay the buyer’s agent fee. Point being, their decision may be the result of their inexperience, not a diminishing need for an agent’s services.
When looking for agents, the survey found that millennials value trustworthiness, knowledge, and negotiating skills above all else. Friendliness and responsiveness are important to them as well.
Millennials Are Interested In Buying for the Long Term
Contrary to the popular belief that millennials are short-sighted and afraid of commitment, Clever’s survey found that only 9% said they were “afraid of being tied down” to a home. Most value safe neighborhoods (38%) and good school districts (35%) over walkability (11%) and short commutes (11%). They believe that buying a house is a good investment (43%), more affordable than renting (43%), and that homeownership is still a core component of the “American Dream” (84%).
Millennials Carry Significant Debt…
Millennials between the ages of 25 and 34 carry an average debt load of approximately $42,000. While this isn’t preventing them from purchasing homes altogether, it’s certainly making it more difficult. 40% of millennial respondents listed “saving for a down payment” as their number-one barrier to homeownership.
It’s also affecting the types of homes they’re looking at. More than half of millennial survey respondents said their budget was $200,000 or less.
…So They’re Getting Creative
But millennials are resourceful, and many are willing to adopt outside-the-box approaches in order to overcome the hurdles they face.
For example, 67% of respondents said they would put an offer on a home in need of major repairs — most likely in an attempt to save on up-front costs. Of course, this could be dangerous for buyers who don’t have a firm grasp on how much specific renovations (or simply owning a home) can cost.
Some are taking another approach, looking at new homes as an investment opportunity instead. Clever’s survey found that millennials are 52% more likely than Gen X-ers and Baby Boomers to buy a multi-family home. They understand the value of renting to generate passive income, which they can apply towards paying down their debt.
Clever Real Estate
Clever Real Estate connects top real estate agents with home buyers and sellers at a discount rate. This survey was conducted using Pollfish to help Clever better understand the Millennial home buyer and how they’re different than older generations.