The pandemic-forced lifestyle and economic changes are showing up in contrarian ways for the millennial generation.
Rather than these challenges causing a delay in home purchasing, new survey data shows millennials are speeding up their home purchase and are willing to adjust the way they virtually search for and buy a home.
According to a recent Realtor.com® and HarrisX survey of 2,000 home shoppers who plan on purchasing a home within the next year, data shows the largest generation in U.S. history is prepared for a competitive market.
“If there is any silver lining to the current economic landscape, it’s that mortgage rates are hanging around record lows. With little to no equity to leverage, millennial home buyers tend to take out larger loans. Historically low rates are making this more manageable, even with rising home prices,” said Danielle Hale, chief economist at Realtor.com.
“Additionally, shelter-in-place orders helped many who were fortunate enough to keep their jobs save for a down payment — one of the largest hurdles of buying a home. The combination of low rates and the opportunity to save is enabling many millennials to move up their home buying timeline.”
In addition, millennials say they would accept financial assistance from family or friends to make their home buying dreams a reality.
Here are key findings of a survey taken in June of 2,000 home shoppers who plan on purchasing a home within the next year.
Millennials are speeding up plans to purchase a home.
• Of survey respondents, 75 percent of millennials have been working remotely since the COVID pandemic hit.
• Of those respondents, 63 percent said they plan on purchasing a home because of their ability to work remotely.
• Nearly half of millennial respondents reported COVID has pushed them to buy a home sooner than their original timeline.
Millennials use virtual home search techniques.
• Fifty-nine percent of millennials reported COVID has changed the way they are approaching their home search. Of those respondents:
• 37 percent are spending more time researching properties online.
• 35 percent are spending more time looking at listings photos.
• 32 percent are spending more time watching listing videos.
• 31 percent are being more selective about the homes they decide to tour.
• 27 percent are driving by the home to check out the neighborhood.
Millennials are ready to compete for a home.
• Seventy-one percent of millennial respondents expect competition when shopping for a home.
• Luckily, 68 percent reported shelter-in-place helped them save for their down payment.
• With home prices quickly rising, 45 percent expect to receive financial assistance from family or friends.
Millennials are tired of their current home and want room for a family.
• Over a quarter of millennials reported they were tired of their current home and that was driving their desire to purchase a home.
• 23 percent reported a growing family as the main driver for wanting to buy a home.
• 22 percent reported favorable home prices, 20 percent reported favorable interest rates, and 18 percent reported the desire to live in a safer neighborhood.
• More than half reported looking for a home below the U.S. median home price of $350,000, with 36 percent looking for an “entry-level” home at or under $200,000, and 28 percent seeking a home between $200,000 and $350,000
• This means 63 percent of millennial homebuyers are looking to purchase a home at or below $350,000 — the median price of a home in the U.S., while 37 percent want a home over $350,000.
• 54 percent believe home prices have hit their peak.
Most millennials aren’t trying to move far.
• Nearly half of millennials – 49 percent – reported they want to move within their current city.
• 31 percent reported a desire to move from the city to the nearby suburbs. According to the survey, millennials expressed a greater desire to move to the suburbs than Gen X or Baby Boomers.
• 13 percent reported they are seeking to move from one city to another within the same state, while only 8 percent want to move to a completely different state.
Read more about millennial trends here www.realtor.com/news/trends/millennials-speeding-up-home-purchases-pandemic.
By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial and residential real estate. For questions, e-mail Tom at [email protected], call 303.441.5620 or visit boulderco.com.