In 2018, Millennials surpassed Baby Boomers as the largest living generation in America. And as with every new generation, Millennials bring with them change. As a result, researchers are trying to understand what’s changed and how best they can market to them.
The real estate industry is no different. A consumer insights report shows that Millennials are the largest generation of potential homeowners the housing market has ever seen with a population of 92 million.
With numbers that significant, Millennials are sure to impact the housing market, much like they changed the technology market. But what types of homes are Millennials really buying?
Millennials: A Fact file
This group of individuals was born between 1980 and 1995. Many are highly educated and at the point in life where they are considering buying a home. The majority of them choose to delay having children and getting married which are both reasons for buying a home.
Some reports state that due to the recession, Millennials aren’t buying homes. Other reasons for putting off homeownership are student loan debt, down payment requirements, and inability to qualify for mortgage loans. However, many Millennials see homeownership as an important long-term goal. Right now, Millennials over the age of 25 make up about 37% of homeowners.
Appealing to a Generation
One misconception about Millennials is that they prefer living in the city over the suburbs. Recent studies show that it’s about half and half – many live in the city, but many are also flocking to the suburbs.
Millennials also want higher tech homes. Not only that, but this population is opting for unique homes that can be personalized to their own tastes and styles. Gone are the days of cookie cutter homes.
75% of Millennials would like to live in a single-family home. The ideal size is, 2,475 square feet with open concept floor plans.
Jill Waage, editorial director of Better Homes and Gardens, said: “The next generation of homeowners wants smart, stylish homes that enable them to connect with friends and family. Our research shows that women 35 and under see value in owning a home and their attitudes toward making space livable through smart technology and integrated design are significantly stronger than those of their older cohorts. The next generation of homeowners will lead the way in adopting new technology — making features like the ability to preheat an oven or unlock the front door from your smartphone the new norm in home convenience.”
For the first time in the history of the property industry, home design is a very important factor when choosing a home. Design is the number one thing for Millennials along with function.
Coming in at number two was exterior lighting followed by story space. 88% said storage is essential. Linen closets, a walk-in pantry, and garage storage are important features to this group.
Additionally, when asked to choose between photos that showed a range of designs, the majority of Millennials opted for a modern traditional design.
Outdoor living also heads the list of features Millennials are looking for. Better Homes and Gardens reports that Millennials say having outdoor space is necessary for entertaining. 51% want an outdoor kitchen sink, refrigerator, grill, and cooktop.
Another very important home feature is energy efficiency. However, it remains unseen if this feature is something Millennials are willing to pay extra for. The survey indicated that they might be willing to pay 2% – 3% more for such features.
Finally, Millennials value community. While community features are essential, 47% do not want to live in a high-density community. They also value their pets and as such are looking for homes that provide pet-friendly environments.