The American dream moves from generation to generation, shaping itself around the aspirations of the current generation. American designer, Maya Lin, believes, “The American dream is being able to follow your own personal calling.”
Contemporary times are a period of significant adjustment in all global communities, with the Millennials coming to the fore as the most dynamic generation. In fact, 50% of America’s labor force will comprise Millennials, while 75% of the global labor force by 2025, is forecast to comprise Millennials.
What is as significant is that, in the U.S., 4.8 million Millennials will be 30 years old in 2020, which is known as the time of life many people buy their first homes Also, the eldest of millennials will be turning 39 in 2020, which is the age people tend to relocate from city to suburbs for family-friendly amenities.
With Millennials representing 36% of home buyers in the U.S. in 2019, they are expected to further propel the U.S. housing market forward in 2020, with many expected to either buy their first home or leave the city in favor of the suburbs, according to an economic forecast published by realtor.com.
With Millennials having been slow to be active on the real estate sector, the assumption was that to find a realtor or to buy a home was not priority for them. However, the reason is not that simple. They came out of college with large student loans which they could not afford to pay because high-paying jobs they expected, were not available. Therefore, many Millennials postponed buying houses and moved in with their parents. Many of them postponed marriage and having families.
Realtor.com Director of Economic Research, Javier Vivas, said, “Millennials are getting older, with better jobs and deeper pockets, allowing them to expand their collective purchase power, and hence, their footprint in the market.” In fact, Millennials are expected to take on more than half of all mortgages in 2020, outnumbering Generation X and Baby Boomers combined.
As Anna DeSimone, author of Housing Finance 2020 and a housing advocate, said, “Millennials have represented the largest share of the home buying market for the past five years in a row with the 2018 share at 36%.”
However, the problem now appears to be that the entry-level type houses affordable to Millennials, are low on supply, with the industry building more luxury houses suited for the mature type of home buyer.
What stands out as critical in the field of real estate as in all other fields, is that unlike any generation before them, Millennials grew up with technology, mobile apps, and innovative platforms. A recent Bank of America survey found four in every 10 Millennials – 39% of the millennial population – say they interact more with their smartphones than with family, friends or co-workers.
As a generation that checks several web sites before buying even a day-to-day item like a sweater, buying a house is a far more complex, technology-driven process with the Millennials. For instance, 58% of Millennials find their home on a mobile device, and 64% of buyers do a walkthrough after seeing an online listing. But strangely, 92% of Millennials are comfortable trusting a realtor in buying their home, which is significantly more than earlier generations. It appears that 74% of Millennials seek assistance in understanding the purchasing process.
In other ways, too, realtors are finding unique characteristics of Millennials, not apparent in earlier generations. For instance, Millennials want move-in ready homes, meaning newly constructed houses, because they don’t want to spend time or money on renovations and plumbing or electricity problems.
As the real estate industry is realizing, Millennials are the least likely, among the generations they have dealt with so far, to define home ownership as a permanent thing. Most are planning to outgrow their first homes and move to a higher-end dwelling even before the normal house-changing time period of 10 years.
Yet, even as Millennials look upon their first house as temporary, there are must-have home features they seek, which the real estate industry is currently ill-prepared for. Growing up with concern for the environment and concepts of sustainability, they seek “Green features” like solar panels, and 46% of them want a luxury kitchen which also serves as a hangout center, flowing into other rooms for convenient entertaining.
As realtors grapple with this demand, they are also having to cope with contemporary work arrangements, where teleworking is becoming increasingly more viable for employers. Over 3 million Americans work from home and require dedicated workspaces in their homes.
With Millennials being a technology-driven generation, cell reception and internet provider options becoming critical factors in deciding to buy a home. Research finds that 43% of Americans who use smart products like Smart TVs, remote security systems and mobile temperature control, are Millennials.
Therefore, as personal finance expert Farnoosh Torabi, says, “Affording a home, one could argue, was relatively easier for the previous generation.”
As American author, Wayne Dyer, said, “If you change the way you look at things, the things you look at change.”