Make way for Millennials. They are taking over the home-buying market, surpassing GenX and Baby Boomers, and this trend is likely to continue in 2019.
According to a Pew Research Center article from March 2018, “Millennials, whom we define as ages 20 to 35 in 2016, numbered 71 million, and Boomers (ages 52 to 70) numbered 74 million. Millennials are expected to overtake Boomers in population in 2019.”
Here are a few trends to expect from the Millennial generation of buyers in 2019.
This is the peak time for Millennials to enter the housing marketing. They are getting older, finding stable jobs, and some are looking to settle down. It’s a good bet this means they are going to actively participate in the housing marketing, even more so than ever before. The rise is demand is going to put some pressure for the real estate market to increase the supply.
Even though Millennial’s are starting to buy more homes than in previous years, there are several barriers to home-ownership among Millennial’s, including student debt, car loans, low credit scores and delayed marriage, among others. They often prioritizing paying off these loans, which not surprisingly, makes it tougher to save the money that is needed to make a down payment.
Interest rates have slowly been on the rise, which will also have an impact on affordability for housing. An interest rate that is at 5 percent will likely make Millennial’s re-strategize, maybe event opting for renting, rather than buying.
Millennial’s are Well Prepared
Popular home TV shows, such as HGTV, will prompt Millennial’s to do their online research. This in turn will prepare them to enter the home market with a degree of knowledge that previous generations may not have had.
They are relying on real estate professionals not to introduce them to homes, most of which they can find online, but to show them more specific things that they may not be able to find online. This may include what neighborhoods are up and coming, which properties are likely to gain value in the years to come, and guidance in the overall process of inspection and deals.
While millennial’s are projected to be the largest population of buyers, it’s important to remember that many of them will be buying entry-level homes. Not only that, but even the average home value is far too expensive for many of today’s millennials.
According to Zillow, the median home value in the United States currently rests at $225,300, which is a lot to ask a first-time buyer to spend on a home. As a result, more millennials will turn to fixer-uppers.
Millennials Rely on Technology
Millennial’s are living in a world that is ruled by technology. Social media and smartphones will continue to influence Millennials home buying habits. This generation relies heavily on online reviews and social media presence to make these decisions. A strong online reputation for real estate professionals is a must to get the attention of Millennials. Showcasing homes on social media, most particularly Instagram, is essential for appealing to Millennials.