JD’s Millennial Minute: Where Do You Stack Up Against Other Millennial Home Buyers?
Where Do You Stack Up Against Other Millennial Home Buyers?
For many prospective millennial homebuyers, the scariest part of buying a home is just how unfamiliar the process can be. Either you’re the first among your friends to buy a home, or you’re lagging behind your peers and wondering how on earth they figured this all out. But as the largest contingent of homebuyers over the last four years, millennials are beginning to shape the real estate market for better or worse.
The National Association of Realtors’ Home Buyer and Seller Generational Trends Report 2016 confirms what most young homebuyers have already realized – buying a house is much different for the newest generation. Student loan debt, a more mobile economy, and the advent of reliable online shopping have all contributed to a marketplace that can be unforgiving and difficult to navigate. So you aren’t alone! Read on to find out how you compare to your fellow young homebuyers.
Show Me the Money
To anyone buried under student loan debt, it may seem obvious that finances set millennials apart from other homebuyers. Around 21% of millennial homebuyers cited saving for a down payment as the most difficult part of the entire process, and 44% had a median student debt of $25,000. That’s more than 10% of last year’s average home price of $220,000.
Without other assets to help out, 80% of millennials relied on savings for their down payment, which is much higher than any other age group. So it comes as no surprise that affordability was a chief concern for over half of these buyers, while 35% or less among older buyers were worried about cost.
Despite financial difficulties, the under-35 crowd remains optimistic – 84% thought owning a home was a good financial investment, while only 68% of buyers over 70 agreed. Naïve? Maybe, but most of these young buyers didn’t experience the most recent financial crisis as homeowners.
A Family Home
Motivating almost half of last year’s young homebuyers was the desire to have a place to call their own, over market opportunity, job relocation, or tax benefits. The average household income of all home buyers in 2015 was $86,100, compared to the national average wage of $26,000 – showing that a combined household income is helpful for many buyers. Indeed, 64% of millennial buyers were married couples.
A Real Helper
If you’re using a real estate agent to help you into your first home, you’re on the right track – 89% of millennials bought their home through an agent. And if you feel like you’re asking your agent a lot of dumb questions, you’re not alone – 71% of the same buyers said that help understanding the process was the biggest benefit to having an agent.
Paperwork was the main home buying headache for the group, yet with all this explaining, millennials still had the lowest agent satisfaction ratings of any other age demographic. So you’re definitely not the only one confused about the process and possibly annoyed with your agent.
What We Buy
While the median length of homeownership is 14 years, millennials only plan to be in their home for an average of 10 years; older groups expect to stay much longer.
The 35 and under group was the most likely to relocate for a job. This could be why 73% of them were willing to compromise on the home they bought on factors such as price, condition, size, and style. For the most part, millennials bought the smallest, oldest, and cheapest houses of any other age group, often by significant margins. Their average house was 1,720 square feet, cost $77,400, and was built in 1984.
So if it feels like you’re making a lot of compromises or buying a much cheaper house than your parents, don’t be alarmed. Your first home won’t necessarily be a forever home and if you’re like your contemporaries, that isn’t your plan anyway. With your first home under your belt and no student loan debt holding you back, that next down payment and subsequent mortgage payments will be much easier to handle.
Are you a millennial? Make sure to check out these other installments of JD’s Millennial Minute:
Homes.com is the place to dream and discover your ideal home! Are you starting to get the itch to look for your first or next home, but don’t know where to start? You’ve come to the right place! Browse our real estate and lifestyle blog for home buying tips, mortgage guides, DIY ideas, interior design, lifestyle topics, general home inspiration, or just some homes fun. We are sure you can scratch that itch and find all the information and tools you need to help in your home search. Want to start looking at available real estate right now? Head to our home page and check out homes for sale or rent listings all over the country.
Happy house hunting!