Millennial Stereotypes and Home Buying
What comes to mind when you think of a Millennial? Most likely, it’s probably something along the lines of a smartphone-obsessed young adult complaining that city homeownership is out of reach—between mouthfuls of $20 avocado toast at brunch.
It turns out, that impression couldn’t be further from the truth. New data from Realtor.com shows that the Millennial generation (those born between 1981 and 1996) now holds the largest share of new mortgages by dollar volume at 42% – compared to 40% for Generation X and 17% for Baby Boomers.
The truth is that Millennials are spending their money conservatively, and not necessarily on city lofts: research shows they are seeking homes with a lower median purchase price, $238,000–and often in the suburbs. To contrast, Baby Boomers and Gen Xers average a median purchase price of $264,000 and $289,000, respectively. And Millennial’s down payments are smaller, averaging 8.8 percent as of December 2018, versus 11.9 percent for Generation X and 17.7 percent for Baby Boomers.
As the generation matures, Millennials will have better jobs—and deeper pockets. This is expanding their collective purchase power, and market footprint. Even though they’re collectively spending more dollars, individually they are focused on affordability–concentrating on less traditional secondary markets where homes and jobs are plentiful.
Sources:
https://nationalmortgageprofessional.com/news/70101/millennials-account-nearly-half-home-loans
https://www.businessinsider.com/millennials-taking-over-mortgage-market-homeownership-2019-2