There has been a seismic shift if the real estate market due to the millennial generation. This age group of 23-39 year olds have represented the largest share in the home buying market since 2015 and it has no plans of slowing down any time soon. What has caused this large shift in the market?
Many people thought the majority of millennials live at home, or are more content being renters because they pushed off purchasing a home later than their predecessors. This is not the case. There is actually a "barrier" preventing most millennials from entering the real estate market, and that "barrier" is affordability. Millennials are more interested in becoming home owners than their parents were, but financial challenges push this dream back. Wages have been stable for the past 15 years, while the cost of living, education, and housing has skyrocketed, which makes saving for a down payment that much harder.
This generation also has a hand in shaping the process of becoming an active home buyer. Many are doing their own research of the available inventory by looking at online listings before they contact an agent. Because of this, high quality photos and videos are crucial when they are considering a listing. And 81% of older millennials found their current home through a mobile app like Zillow or Realtor.com.
The style of homes being purchased has shifted from large homes that show one's status to slightly smaller homes. This generation seeks properties that fit their current lifestyle- such as wanting a larger yard for pets or space for an organic garden. Location is very important. Millennials prefer easy access to shops, restaurants, and transportation while also remaining affordable, even it if means moving to a new town or state.
Because a large majority of millennials desire to become homeowners, they are willing to make sacrifices to save for a home, such as not going out as frequently or moving in with family and friends- unlike the generations before them. They also are putting less money down to try and become homeowners sooner.
A report by Harvard predicted the number of millennial households are expected to increase by 2.7 million over the next 10 years, causing for an increase in new construction to keep up with the rising demand.