Millennials, otherwise known as Generation Y, Generation Me and Echo Boomers, have grown to represent 32 percent of homebuyers, which is the largest portion of the home buying market. According to millennial Austin Hale, product manager for real estate investment software company Realeflow, “Millennials present an entirely new dynamic in the real estate market. [They’re] much more likely to rent, to congregate in urban areas, and to be cautious when taking on debt.”
The purchasing and lifestyle habits of millennials shape the economy and affect everything from the energy market to how TV is made. Below are four chrcteristics of millennial homebuyers.
1. MILLENNIALS PREFER TO RENT
The millennial generation favors renting over buying property for a number of reasons. They wait to commit to homes; desire to live in trendier, more expensive areas; or want the freedom to pick up and go with relative ease. A survey found that 10 percent of millennials don’t feel ready to manage a property and prefer having a landlord to take care of maintenance issues.
2. MILLENNIALS SEARCH FOR THEMSELVES
Millennials are tech savvy and more likely to look for housing online than through an agent—50 percent of millennials found homes using the internet compared with 31 percent who found homes using an agent. Almost all millennials still use a real estate agent or broker to purchase a home, but they prioritize those with websites that include photos, interactive maps, and detailed home information.
3. MILLENNIALS SEEK OUT SMALL, EFFICIENT SPACES
Many millennials like the ideals of minimalist living—fewer possessions and smaller spaces—because it provides them with the flexibility and financial stability they crave. Similarly, they also value energy-efficient appliances to help keep their bills and carbon footprints low. Millennials are comfortable in small spaces because they see their living quarters as a home base, not necessarily where they want to spend all their time.
4. MILLENNIALS DON’T SHOP AROUND FOR REAL ESTATE AGENTS
Working with real estate agents is a new venture for many millennials, 23 percent of whom are unaware that they can negotiate a real estate agent’s commission and fees. Nearly half of millennials find their real estate agent through a friend, neighbor, or relative, and 72 percent of millennial sellers only contact one agent.
MILLENNIALS CITE HONESTY, TRUSTWORTHINESS, AND REPUTATION AS THE THREE MOST IMPORTANT QUALITIES IN A PROFESSIONAL REAL ESTATE AGENT.
Millennials have just begun to shape the housing market. As their incomes increase with age and they start wanting to settle down, they’ll continue to effect change. If the real estate industry can understand their needs and innovate where necessary, it may be able to convince millennials to give up renting and move into the comfort of their own home.