By Courtney Soinski
Did you know that millennials have outnumbered baby boomers? Specifically, they make up 87 million of our population versus 76 million baby boomers, according to the Joint Center for Housing Studies of Harvard University.
“Millennials” are those born after 1982 and more and more of them are entertaining the idea of home ownership. “Ultimately, the large millennial generation will make their presence felt in the owner-occupied market,” says Daniel McCue, research manager of the Joint Center for Housing Studies, “just as they already have in the rental market . . "
While demand is currently strong among millennials in the rental market, rent prices are going up. As incomes increase through either economic or job growth, they may be ready to buy. Additionally, the number of households in their 30s should increase by 2.7 million over the coming decade, which should also boost demand for new housing.
There is evidence that millennials are already beginning to consider buying versus renting, according to the 2014 NAR Home Buyer and Seller Generational Trends study. This report states that “87 percent of buyers aged 33 and younger consider their home purchase a good financial investment compared to 74 percent of buyers 68 and older.”
For now, tight credit, still elevated unemployment, and mounting student loan debt among young Americans are moderating growth and keeping a good number of millennials and other first-time homebuyers out of the home ownership market, the study concluded. It’s also important to consider how potential GSE reform will affect the cost and availability of mortgage credit for the next generation of homebuyers.
Working with this large group of buyers beginning to enter the market may also be a different experience for real estate professionals. This group embraces technology, particularly mobile and social media, and brings a new set of housing preferences and expectations to the table. For real estate professionals, this means beginning to understand how to effectively target and engage this up and coming group of home buyers.