The historical path to home ownership was to go to school, get trained, get a good job and then buy a house. However, millennials face financial pressure from that first step onward, and it can get in the way of saving up a down payment. Consequently, this demographic has revolutionized the home search process, making real estate agents change how they connect with the public.
The Numbers
Previously, those buying their first homes were between 25 and 34 years of age. As median home prices have gone up, young people have less income available to save up for that 20% down payment. Financial stress, including the student loan debt rate, can severely limit a young person’s ability to save. Another demographic trend shows that young people are more inclined to stay under the roof of their parents for longer than previous generations did.
Millennial Homeownership
The Generation X mindset that focused on getting the biggest house they could afford is not shared by millennials. Extremely large homes are not as sought-after as they once were. The focus on tiny houses has led millennials to seek to live better with less, but smaller homes are becoming rarer. Additionally, millennials have a hard time investing in a property that needs updating or renovation. To many, buying can be intimidating, which can also be quite discouraging. The desire to move into a home that is ready to live in also reduces the pool of available homes.
Communication Challenges
The communication gap between the millennial demographic and real estate professionals is quite large. Young homebuyers prefer to avoid phone conversations. In fact, for many young home shoppers, the number of phone calls can mean the difference between working with one real estate professional or another. The pool of real estate agents is older than the pool of home shoppers, and real estate professionals who aren’t working to master new technologies such as email and texting may be left behind by millennial home seekers.
Additionally, today’s homebuyers can do a lot of homework before they ever set foot in an actual house. Real estate agents need to be flexible in order to effectively communicate with their millennial clients.
Millennials want to buy homes on their terms. They’re not in the market for a starter mansion. They also don’t want a call from every real estate agent in the book if they show interest in a house. The real estate market is being shaped and changed by millennial buyers.
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