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May 2017   Volume 43, Number 5      
 

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12 Surprising Facts about Millennial Homebuyers

Many millennials still live at home with their parents. However, this doesn’t mean people born between the years 1981 and 1997 don’t want to own their own homes. In fact, a Realtor.com survey revealed that 61 percent of first-time homebuyers are under the age of 35.

There are many more surprising truths that Realtors should be aware of when it comes to the millennial generation and real estate. Here are 12 things Realtors should know about millennial homebuyers.

  1. Millennials Are Saving Up.According to a recent TD Bank survey, more than 75 percent of millennial respondents reported that they are saving for a down payment on a home. In addition, those surveyed plan to buy a house within the next five years.
  2. They Plan to Become Suburbanites. Although the majority of millennials currently rent in cities, according to a Realtor.com study, 50 percent of millennial respondents ultimately plan to settle in the suburbs. Additionally, 11 percent would prefer to buy in a metropolitan area, 11 percent want to buy in a small town and 11 percent want to buy in a rural area. The remaining respondents were undecided.
  3. They Want to Buy Single-Family Homes. Seventy-three percent of millennial respondents hope to purchase either a single-family home or townhome. Just ten percent want to buy condos and only 15 percent want to buy multi-family dwellings.
  4. They Want Move-in Ready Homes. The TD Bank survey found that 78 percent of millennial respondents want homes that are move-in ready. They want to skip the fixer-uppers.
  5. Millennials Are Putting Less Down. While down payments of twenty percent have been the rule for years, 35 percent of millennials are putting down less these days. Despite this, they want to pay their mortgages off after 15 years.
  6. They Likely Aren’t Prepared for Unforeseen Costs. The home buying process comes with many hidden costs. A TD Bank survey found that 17 percent of first-time homebuyers aren’t prepared for these expenses. In fact, 44 percent of millennials incurred up to $5,000 in unexpected costs during the mortgage process.
  7. Millennials Are a Diverse Group. According to a Zillow study, millennial homeowners are more diverse than previous generations.
  8. Millennials Don’t Rely Exclusively on Tech. While nine out of ten millennials look to the internet for home buying information, they actually reach out to real estate agents more than other generations. Millennials contact at least two when buying (and three when selling) a home.
  9. They Want Control. A 2014 Fannie Mae survey found that millennials want to own their own homes so they can control their living spaces, and renovate as they see fit.
  10. They Crave Community Engagement. The Fannie Mae survey found that seventy-five percent of responders cited feeling engaged in their community as their main reason for wanting to buy a home.
  11. Millennials Aren’t Letting Student Debt Stop Them. A Zillow analysis found that among Millennials the desire to own a home increased for each level of education attained.
  12. Millennials Believe They Can’t Afford Homes. Despite their goals, a NerdWallet analysis found that millennials worry they can’t afford homes and aren’t buying at the rates that previous generations bought homes. However, if counseled, many millennials would in fact reach a monthly debt-to-income ratio of 32 percent, which is well within the range acceptable to most lenders when considering mortgage applications.

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In this issue:

12 Surprising Facts about Millennial Homebuyers

Cities Where Over 50 Percent of Millennials Own Homes

Citigroup to Exit Mortgage Servicing Business by 2018

House Flipping Frenzy Returns to U.S. Real Estate

Mortgage Volume Increases by 3.3 Percent as Borrowers Rush to Beat Rising Rates

Survey Shows Smart Home Devices Still in Early Adopter Phase

U.S. Home Prices Hit a 2.5-Year High

Wall Street Eyes Shopping Malls as Next U.S. Credit Crisis

Northeast Has Most New Home Starts

Landscaping Tips to Improve Curb Appeal

 


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