The difference between generations has presented changes to the real estate market. What once existed where people followed the passage of life: one finishes school, gets a job, gets married, and then buys a house. Millennials are not so interested in the notion of subscribing to this old school way of living, especially the part about buying a home outright and planting roots. This generation is all about having options and doing things their own way, and it’s something they exercise when it comes to living situations. This results to millennials developing a different approach towards home ownership.
Naturally, the real estate market is restructuring just to keep up with the demands of the millennials and build their business around them. So how are this generation of people different from their parents and grandparents in terms of home ownership? Here are the critical things you need to know about millennial homeowners.
Convenience is high on their list
A large portion of the previous generation has shown that they spent their savings on a large home in the suburbs as preparation for establishing their roots and raising a family. Millennials on the contrary are not fond of this idea. This group is attracted to convenience as a prime consideration, and growing from that convenience. This group would rather stay close to work, and other necessities to build savings, which they can experience luxuries. Millennials are open to utilizing public transportation and other forms to compensate for their pocket.
Renting for the Long Term
Millennials, home ownership can be a very heavy financial weight that can strip a person of life’s other pleasures. This burden forces millennials to understand the responsibility that comes with a large mortgage payment. Unlike their parents or grandparents, this new generation makes allotments for luxuries, e.g. travel and going out. These may be pushed to the back-burner for the understanding of owning a home. The growing debt that this millennial family experience is another reason why millennials choose renting. The majority of this generation is strapped with student debt, something that makes debt-to-Income ratios difficult to manage when adding a home mortgage to their obligations.
They want to be in the “Know”
It’s no secret that the urban sprawl back from the suburbs is happening at a rapid pace. Millennials, specifically the single and unmarried ones, are participating in social activities in the city. This is why condominiums with low HOA fees are a very attractive investment. Condo buildings are positioned in great locations and are just a short walk or drive away from social areas that are of interest. This reinforces the notion of maintaining the convenience of having their activities and necessities close to their social circle.
Technology at their finger tips and in their home
Whether renting or owning a house, this generation wants everything on their finger tips, with ease. There are multiple apps available which deliver home shopping, mortgage payments and news 24/7. Moreover, technology is at their forefront of their home buying decision. According to a 2015 National Association of Realtors study, millennials are more attracted to modern kitchens, bathrooms because they are shopping with a limited budget. This allows them to understand where the renovations may be geared towards. The silicon valley firms understand this generation best, thus delivering and researching smart home technologies, e.g. “Nest”.
Home Ownership is not out the window
This young and changing generation has not closed their doors on home ownership. The Millennials believe there is always time to make the big jump to home ownership. These mellenials are currently working for their first home to own. They see renting as a temporary solution to pay down their debt and save up for their house.
Millennials have their parents’ house longer than ever
Previous generations, once they hit 18 they were out to college and the door closed behind them to their parents’ house. If they went back to their parents’ house of residence, it was almost a sign of failure. Today with increase college tuition, students are commuting from their parents’ house. This is a great way to save, and receive a great education simultaneously. These millennials would rather cut back on the liberties delivered by independent living just to save on rent money.
For the reasons above, it details the need to understand the generation that is coming to light in the home buying realm. Certain adjustments have been made by Developers, Agents and Loan Officers to cater to the changing times. Condominiums are being geared toward convenience, price points, and amenities which are constantly being refined and marketed to the new generation.