Table of Content
- Despite being the largest generation by population, only 17% of homeowners are millennials
- Saving for a down payment was the most difficult part of the homebuying process for 25% of homebuyers under 30
- The Best Mortgage Programs for Millennials
- Reasons Why Millennial Home Sales Are Up
- What types of homes are millennials on the hunt for?
- Property for sale in Gunzenhausen
- Share this article
Millennial home buying trends are a hot topic in the real estate world. Millennials, also known as Generation Y, make up about 40% of all homebuyers in the nation. Born between 1981 and 1996, they’re settling into careers and buying homes for the first time.
According to survey data collected by Porch, the average American homeowner has spent more than $9,000 on home repairs and maintenance, while 20 percent have spent $13,000 or more. While 55% of homeowners try to do a job on their own before calling a professional, this can be a risky decision – only 31% report being able to finish these projects without encountering major problems. As environmental awareness and technology increases, so do energy-efficient housing features that will become a big part of millennial home buying trends.
Despite being the largest generation by population, only 17% of homeowners are millennials
These government-backed loans are issued through approved banks and lenders, allowing lower down payments. They also offer lower credit score requirements than conventional loans. The downside is that homebuyers usually pay higher interest rates and PMI since they are considered riskier than a conventional loan. For those with good credit, a Conventional 97 Loan is an excellent option because it only requires a 3 percent down payment. This loan is reserved for first-time home buyers or those who have not owned a home in the past three years.
Partnered with low maintenance and smart features, many millennials like the idea of their home being energy efficient. Things like a smart thermostat, LED lights, and energy-efficient windows can check off all three boxes and really attract home buyers. The American Dream is alive and well with Millennials, with 85 percent interested in homeownership at some point. More than half of all buyers who are considering purchasing a home in the next year will be first-time buyers, and almost two-thirds are expected to be less than 35 years old.
Saving for a down payment was the most difficult part of the homebuying process for 25% of homebuyers under 30
As little as five years ago, millennials were referred to as the lazy, narcissistic, entitled Me Generation—a label that may suggest millennials are also reckless and irresponsible with their money. That means there’s more than a one and three chance that the person who buys your home has a birthday sometime between 1981 and 1996—which puts them between the ages of 22 to 37. Company managers figured their iconic Italian motor scooters would resonate with 20-somethings the most.
Every demographic has its own traits and behaviors when it comes to the real estate and mortgage markets. In this article, we’ll discuss the latest home buying trends among millennials in Washington state. Almost half of millennials ranked a home gym as one of the most appealing features of a new home .
The Best Mortgage Programs for Millennials
Location is one big thing that cannot be changed when it comes to choosing a house. It is also one of the biggest determining factors when buying a house, regardless of the demographic. While the older generations tended to prefer houses within quiet neighborhoods and places away from the urban centers, millennials value walkability, and convenience. You probably hear a lot about millennials and how their approach to many things is different than in generations past.
These roughly 80 million adults are quickly becoming the largest segment of homebuyers today. Millennials are reinventing the real estate agent-client relationship, where to get mortgages, and what the ideal home looks like. Read on to learn how Generation Y is reshaping the homebuying process.
Reasons Why Millennial Home Sales Are Up
However, the share of 25-to-29-year-olds living with their parents declined to 21.5% in the winter, as did the share of 18-to-24-year-olds that were not students. Older cohorts were much less likely to cite saving for a down payment as the most difficult aspect of homebuying, a likely reflection of having more time to boost their wages and save. Baby boomers have long dominated the housing market and still played a significant role in 2020, accounting for 32% of all homebuyers. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado since 1992.
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Unless we understand the market, we will be missing out on the biggest customer set in the industry right now. When you build a new home, you can choose the floor plan that’s right for you, the options that will personalize the space to your tastes and you can make changes right from the start. There’s no need for renovations down the road since you can anticipate any changes to your life and choose a floor plan accordingly. You won’t get that with a resale home, which you and your family must adjust to.
Along those lines, of millennials that have delayed homeownership due to the pandemic, 28% said they were reconsidering what type of home to purchase while 27% said they were rethinking whether to buy altogether. Two-thirds of millennials who had homebuying plans delayed by COVID-19 cited loss of income as the reason. Meanwhile, 21% had to dip into money saved for a down payment for pandemic-related reasons. 37% of homebuyers in 2020 were millennials, more than any other generation. Despite unprecedented challenges, such as the COVID-19 pandemic, record-high home prices, and having to save up for a down payment, a number of millennials are taking out mortgages to buy more expensive homes. Even with those challenges, millennials who have yet to buy and don't struggle with increasing pessimism are eager to buy homes of their own.
A quarter of homebuyers under 30 and 18% of homebuyers between 31 and 40 years old said that saving for a down payment was the hardest part of the home-buying process, per the National Association of Realtors. The COVID-19 pandemic and its economic impact are the clearest and most extraordinary challenge millennials face as they reach their mid-30s. According to a survey by Apartment List, 40% of the generation say the pandemic has impacted their homeownership plans, with 21% saying COVID-19 has caused a delay in homebuying. Despite mortgage rates dropping throughout much of 2020, only about 5% of millennials said they timed their purchases based on financing options. Instead, over 50% said it was "just the right time" and that they were ready to purchase a home.
Since they are generally defined by their active social lives and careers, it would make sense that they would want to be close to things that cater to that. It is a plus to have a home closer to the urban center that allows for a short commute to work and fun. They prefer homes near restaurants, shopping centers, coffee shops, and public transit over lots of land for privacy. Garage doors, lights, TVs, sound systems, locks, and security systems can all be controlled by a smartphone. They’re definitely looking to live closer to their jobs to avoid long commutes, with 71% of Millennials influenced by the convenience to their job when picking a neighborhood. They’re also eager to live in communities with walking or jogging paths, plenty of bars, restaurants, and shopping, and solid school districts.
But before you start feeling sorry for Millennials because of the student loan mountain they have to climb, consider that their use of debt goes far beyond the cost of education. While millennials have a reputation for saving the money they do have, they’re not so interested in making the big bucks when it comes to their careers. They view the internet as an authority , and are early adopters of digital technology. Smart phones, tablets, smart watches, laptops—millennials have them all and they use them with a savviness that’ll make your head spin. They’re also sure to have profiles on a multitude of social media sites like Facebook, Twitter, and Instagram.
Whether you’re a Millennial, a Baby Boomer, or anything in between, Casa Real Properties can help you find the perfect home. We take pride in helping individuals from all walks of life fulfill their dream of owning a home in New Jersey. From obtaining a home loan to getting your keys on closing day, our experienced agents are with you every step of the way. Currently, older millennials make up the biggest generation of homebuyers in the present market. The median age is 36 years old, according to Mortgage Professional America Magazine. Millennials with less-than-stellar credit scores can still qualify for a mortgage via an FHA loan.
