Posted on August 22, 2017
Millennials have come of age and are proving to be a strong force in the housing market. A recent National Association of Realtors® report, Home Buyer and Seller Generational Trends, states that millennials have accounted for the largest share of home buyers in recent years. This is an interesting statistic considering sources also consistently report that millennials are entering the housing market at a slower rate than previous generations. Various studies cite a range of reasons for the delay in making this milestone investment. We read that they are waiting until later in life to start settle down and start families, contending with payments on higher student debt, dealing with a lack of affordable inventory, and–in a somewhat interesting contrast to the other factors–holding out for homes that meet their higher expectations.
When millennials do set out to buy homes, what motivates them? What features answers the higher expectations they are holding out for?
Millennial buyers view interior luxury as much more important than exterior luxury, according to a study commissioned by Northshore Fireplace on 1,000 millennials from of all fifty states. A variety of factors may come into play in this perspective. For millennials dwelling in metropolitan areas, they may perceive cities and communal parks or green spaces as their preferred gathering places over the traditional big backyards that previous generations prized. Also, upscale interiors may better suit millennials’ lifestyles and love of technology, while providing comfortable, flexible living and workspace.
First time home buyers typically allocate much of their budget to the down payment and furnishings which leaves little for major renovations. Millennials want luxury kitchens and master baths, and they want them from the get-go. Millennial buyers’ priorities for kitchens include high-end cabinetry and surfaces, eating space, a walk-in pantry, and new kitchen appliances. The top desire for a master bath is a separate tub and shower, with having only a shower in the master bath ranking #5 on millennial’s list of most unwanted features (according to a National Association of Home Builders study).
According to a SuntTrust survey conducted by Harris Poll, mortgages have literally gone to the dogs. A third of millennial-aged Americans reported the desire to have a better space for a dog influenced their decision to purchase their first home. In fact, dogs ranked among the top three motivators for first-time home buyers and were cited more than marriage or the birth of a child.
The majority (48%) of millennial buyers (36 years and younger) surveyed by NAR prefer to buy new over resale to avoid renovations and problems down the road. Low maintenance homes are a priority for millennials; they don’t want to spend their weekends doing chores.
Roughly two-thirds of millennial buyers are married, and now they’re starting their families. While those without children may still prefer to be close to the action of the city, a healthy percentage of those with kids seek more space at an affordable price. This is pushing young families back to the suburbs. According to the NAR, 57% of millennial buyers are most likely to purchase in the suburbs or a subdivision.
Internet and cell service is important to the millennial generation, and a home’s desirability can be diminished or increased based on the quality of service and provider options. Home automation is becoming essential as millennial buyers increasingly want to control their home systems – heating and cooling, lighting, and home security – from their phones.
Despite the buzz of the tiny house and ‘not so big house’ trends, the stats show that millennials want more–literally. According to the NAHB study, millennials want homes with over 2,300 square feet, compared to all home buyers at a median 2,020 square feet and baby boomers at less than 1,900 square feet. And over 40% of the millennial buyers want at least four bedrooms, compared to the three bedrooms desired by half of all buyers. Millennials also want three outdoor spaces – a front porch, a deck, and a patio.
As with any generation, the line between what millennials want and what they can afford is a fine one. Even within the most notable priorities, there are contrasts as they balance their need for reasonably priced options with the desire for luxury and more space. Crossville sees great opportunity, as tile provides the style and panache millennials desire while also offering the value, ease of cleaning, and long term appeal that’s needed. Thankfully, our creative solutions translate across generations.