Profile of the Millennial HomeBuyer
Due to their extensive size, millennials have turned out to be disrupters in many industries, and real estate is no exception. As millennials reach peak homebuying age, Real Estate Agents have started to pay attention to the way millennials prefer to move through the process.
They are a unique generation, with habits and preferences unlike any other previous group of homebuyers. According to the National Association of Realtors, they have accounted for more than a third, 36 percent of all home purchases in the past year. As a result, understanding the traits of the average millennial in search of a home is crucial for a Real Estate Agent to provide the best possible customer service.
How Millennials Communicate
In general, millennials have little interest in talking on the phone. They would much rather have a Real Estate Agent contact them via text or email. They usually do not want to spend time talking on the phone for something that does not merit an entire conversation.
How Millennials Search for Homes
For millennials, finding a home is all about mobile. The 2019 NAR HomeBuyer and Seller Generational Trends study found they are the most likely generation to use a mobile or tablet application as well as a mobile or tablet search engine during their home search.
All this technology has made the millennial homebuyer more informed. By the time millennials sit down and talk with a Real Estate Agent, they have likely already determined which neighborhood they want to buy in, and they may already have a list of homes in which they are interested.
Real Estate Agents, however, do not need to worry about being replaced by apps. Despite their love of Internet research, millennials depend on Real Estate Agents more than any other generation. The 2019 NAR Homebuyers and Sellers Generational Trends Report recorded that while 62 percent of millennial homebuyers used the Internet as a major shopping source, 20 percent used a Real Estate Agent.
Millennials have an enormous amount of information available at their fingertips, and they need Real Estate Agents to help them filter through that information. The homebuying process may be overwhelming, and Real Estate Agents are essential sources. Millennials rely on an agent's expertise and experience to help guide them through the process and tell them if their decisions are correct.
Millennials also want to be a part of every step of the homebuying process, so Real Estate Agents should treat them as partners, rather than customers. They want a brief, productive communication. In addition, millennials choose their agents based on referrals, so agents should make sure to have testimonials and online reviews on their website.
Why Millennials Want Homes
Many millennials are approaching homebuying with an investor attitude. They are not purchasing homes with the intent of living in them for long periods of time. Rather, they want to spend a short period fixing them up before selling them for a profit. Millennials are even prioritizing homebuying over other important milestones, like marriage. The massive costs of weddings have become a turnoff to millennials, and they are demonstrating a preference to put that money in real estate instead.
Millennials are less focused on large suburban homes and instead are focusing their searches on homes in urban areas - properties that are close to their offices and in walkable neighborhoods. These properties are considered a very good investment.
The NAR report found the top reason millennials purchase a home is the simple desire to own their own home.
The Problems Millennials Face
While Millennials have recently made up the largest portion of homebuyers, there’s even more of them if not for the financial barriers stopping many from taking the plunge into homeownership.
More than any other group, millennials face crippling student loan debts. On average college graduates owe about $32,700. There are programs to help millennials buy a home despite this debt, but it is still difficult to afford a down payment. Another obstacle is competition with investors. Because millennials are searching for short-term homes, they are often bidding against investors who are willing to pay cash up front.
The Bottom Line
Millennials will have a huge impact on the housing market for the next decade, just because of demographics alone. So, whatever a few of them do, there's enough of them that they'll make a big impact.
There is still a generational gap between Real Estate Agents and their millennial customers, as many agents are older and accustomed to different ways of conducting business. Understanding these traits are key to providing the best possible guidance to the millennial homebuyer.
The major thing to remember is millennials now depend on agents to help them understand information, rather than to help them find it.
Contact us today to learn more!