Millennials and homebuying don’t mix, or so seems to run the standard narrative. They're too busy with their urban tribes, growing lumbersexual beards, living in their rented micro-unit apartments, and stocking up on homebrew supplies. But is that really the case? While some Millennials certainly fit this bill, last year proved that a sizable portion of the Millennial generation is no longer downsizing or enjoying the renter’s lifestyle. It’s predicted that this year, one of three homes will be purchased by Millennials, and like each generation before them, Millennials are bringing their own distinct approach to the homebuying process.
Before diving into this new brand of homebuyer, why are Millennials finally buying homes? A few reasons. First, they're older and some have had enough time in the job market to somewhat stabilize their financial situation. Also, rent costs continue to rise, leaving Millennials questioning if the exorbitant monthly hits to their paychecks still make sense. Lastly, and perhaps most importantly, in some ways their hands are being forced. The catalyst for this onslaught of Millennial homebuyers boils down to this: kids. Though Millennials have delayed marriage and having children, the oldest of this generation are in their mid 30's and, to be blunt, the biological clock is ticking. As Millennials enter the new and hectic world of parenting, finding homes for the little ones to run amuck in is starting to seem like the only sensible thing to do. So here it is. The Millennial approach to buying a home:
#1 - They’ve sucked “aspirational” out of the American Dream.
The traditional dream of getting married, buying a house with a white picket fence, and carrying your wife across the threshold has all but disintegrated. For Millennials, homebuying isn't the aspirational dream that it once was. It's a practical move. A sound financial decision. That dream wedding? It can wait. While it's true that generations past have kept practical considerations in mind when buying a home, Millennials are taking it a step further. Thirty-eight percent of American Millennials said they would, or have, put off a wedding or honeymoon in order to afford to buy a home. The dream—for now at least—is financial stability. Everything else is on hold.
#2 - They’re getting financial help, one way or another.
All generations have received help or support of some kind when buying a home, but Millennials aren't just looking to banks for assistance. “I couldn't have done this by myself” is a common sentiment among Millennial first-time homebuyers. With the crushing student loan debt that they're still very much struggling with, saving up for a sizable down payment has seemed like a nearly impossible feat. So Millennials have gotten creative. Some are moving in with parents to cut costs and fund their homebuying savings accounts. Others are taking loans from parents or pooling money with siblings, and many are looking into alternative financing options like lease-to-own. Unafraid of disrupting "the way it's always been," Millennials are doing what they need to get the job done. Or the house bought.
#3 - They're allergic to assembly line.
Cookie-cutter might as well be a curse word for Millennials. Having grown up in a world that let them customize just about everything, they've proven themselves to be anti-assembly line. With access to sites like Pinterest, Houzz, and YouTube, Millennials have been able to teach themselves fixer-upper skills and personalize their homes to fit their unique needs and specifications. They're DIY homes, and Millennials are all about it. One in three Millennials would rather buy a "fixer-upper" than a house that needs minimal repairs. In their eyes, it's a win-win; they get a cheaper home that they can make their very own and have some fun along the way.
#4 - They want all the space.
Here's a short list of things Millennials are tired of: enlisting friends to help them move every time rent spikes, trips back and forth to storage units to fetch things that don't fit in their tiny apartments, circling the block five times to find a decent parking spot after a long commute home. When you add kids into the mix, buying a home starts to look like the sane way to go. It's true. Millennials, the generation marked by their love of urban everything, just want some space. A yard for kids to run around safely. Closets, garages, storage areas to organize their stuff. Space to do their own thing and also have some privacy (no more noisy neighbors rocking out to the latest T-Swift single at 1 am on a work night). Though this need for more room isn't uniquely Millennial, it certainly flips the "we don't need space or things" narrative on its head. After years of being crammed into tight college dormitories and living in cramped apartments, Millennials are more than ready for and are actively seeking some elbow room.
#5 - Their go-to is online.
This will shock no one: the internet is a go-to resource during the Millennial homebuying process. Be it via resources like Zillow, Trulia, Redfin, or apps that tell you how walkable a certain city is, Millennials are going online to make the best, most informed decisions about the homes they're buying. And some Millennials actually end up using that technology to buy their homes. Like, to actually purchase them. 26% of Millennial homebuyers bought their home via mobile device. In an attempt to meet them where they're at, the industry is taking note and acting accordingly. We're seeing more and more innovative online offerings and specialized campaigns targeting the Millennial consumer, like the lol-worthy Trulia haunted house prank.
While the Millennial generation may still be working to shed their reputation as kids that will never move out of their parents' basements, the fact is that these "kids" now have kids—and basements—of their own. They're transitioning into homebuying slowly but surely, and they're doing it as only Millennials could.