Millennials are often thought of as younger 20-somethings, but many are in their mid-to-late 30’s and are finally ready to become home buyers. We’ve already seen an increase in Millennial homeownership in 2019, and we’ll see more in 2020. Since Millennials have a reputation for being poor, real estate agents haven’t prioritized marketing to them, but that’s changing. Since Millennials with a college degree earn more than those without, they will become the driving force in the residential real estate market.
According to data reported by Statista, 80% of U.S. Millennials plan to eventually buy a home, and 15% say they’re able to save for a 10% down payment within one year. That’s a huge difference compared to years past where many Millennials were barely scraping by or living with their parents to pay off student loan debt. Other data sources report a majority of Millennials prioritize homeownership over getting married and having kids.
Student loan debt has kept Millennials from becoming home buyers – until now
It’s taken Millennials more time to become homeowners mostly because of student loan debt. The average student loan debt payment is just under $400/month which makes it harder for people working retail jobs to save anything for a down payment on a home. For instance, 86% of Millennials with outstanding student loans delayed buying a home because of their debt.
So far, 29% of Millennials with student debt have been able to finance the purchase of a home. Now that a large portion of Millennials have had time to become financially stable, we’ll see more Millennial home buyers moving into 2020.
Millennials have unique priorities regarding homeownership
The Millennial generation tends to have different priorities than past generations, which means real estate agents will need to change the way they market properties to Millennials. Contrary to popular belief, they’re not afraid to spend money on things they deem important. For example, Millennials outspend all other age groups when remodeling their kitchens and bathrooms; they spend 42.3% more than the average person on a bathroom remodel, and 17.7% more on a kitchen remodel.
Millennials also require adequate workspace in the home. Although it comes with challenges, Millennials prefer working from home, either as a contractor in the gig economy or as a remote employee. They want homes with open floor plans and a room big enough to dedicate as a professional office. This means they’ll be looking for two bedrooms, at minimum.
Millennials are all about smart technology
It’s safe to say the smart homes of the future will be largely Millennial-owned. Currently, most smart technology is a luxury with the exception of small devices like thermostats and speakers that the average person can afford. Smart homes of the future will be full of connected devices that go above and beyond. For example, low-end smart refrigerators alert you when the door has been left open. That’s peanuts compared to what’s possible. For instance, there is a $6,000 refrigerator that will reveal its contents when you tap on the door. That’s the kind of smart tech Millennials want. In fact, they’re willing to pay 20% higher rent for smart homes, and 44% of Millennials will give up a parking space for a home outfitted with smart technology.
If realtors want to tap into the Millennial market, they’ll need to focus on smart home technology. Sellers would also be wise to install smart appliances and other tech like keyless locks, connected doorbells, security systems, and entertainment systems to attract more Millennial buyers.
The market is changing, realtors get ready
The home buying market has already shifted and it’s only a matter of time before Millennials make up the majority of new homebuyers. It’s time for realtors to start focusing on what matters most to Millennials and in doing so, they’ll finally reach a market that has been ignored for too long.