There are plenty of stigmas that dog each generation, but one that’s still felt today is that Millennials simply aren’t interested in buying houses.
Research, however, tells a different story. According to the “Bank of the West 2018 Millennial Study,” about four in 10 Millennials already own a home, and a report from the National Association of Realtors states that individuals under the age of 37 are the largest share of home buyers at 36 percent of the market.
These statistics are powerful, but even without them, making generalizations about any group of people can only hurt an agent’s career. By assuming people aren’t interested in buying a home simply because of their age, you risk missing out on a great opportunity.
Everyone Walks a Different Path
The decision to purchase a home is completely dependent on individual circumstances, and everyone’s life plan is unique.
For instance, my grandson is about to finish his bachelor’s degree and is in no hurry to own a home. He wants to go see the world. He’s looking into teaching English in a foreign country or spending time in New Zealand. Buying a home doesn’t make sense with his current circumstances. Meanwhile, my nephew is married, already owns a home, and is looking forward to purchasing his first rental. Both young men are in their 20s, but their circumstances are vastly different.
Environment is also a major factor in a person’s housing choices. I fully believe most people buy and sell homes based on major life events. Some of these events are cause for celebration — getting married, expecting a child, earning that promotion — and could signal that it’s time to settle into a forever home. Others, however, are rooted in pain: going through a divorce, losing a loved one, or being let go from a job. No matter what season of life someone is in, these unfortunate circumstances can dictate whether he or she is ready to jump into homeownership.
New Generation, New Experiences
The best way to offer value to Millennials is not to generalize; rather, understand common factors currently shaping the younger generation’s perception of homeownership.
For instance, we’re now on the other side of a major economic recession, but as it was unfolding, many Millennials were coming of age. Imagine watching your parents lose their home to foreclosure. After experiencing such loss, many of us might think twice about sinking our money into homeownership. Personally, I watched my dad file for bankruptcy because of my mother’s poor spending habits, and I learned to make sure I paid my bills, paid for big purchases with cash, and was careful not to overextend myself. We’re all shaped by our personal experiences.
This may be at the root of why many Millennials are skipping that first starter home and, instead, saving money to purchase their dream home. The concept of buying a starter home to build equity with the intent of eventually putting it toward a “better” home in the future is built on the certainty that you’ll be able to sell the house for more than you paid for it. And that’s something many Millennials aren’t willing to bet on.
Furthermore, consider this startling statistic: More than 44 million Americans have student loans, with the average amount of debt sitting around $33,000. How did this happen? During Millennials’ formative years, the narrative for success was heavily centered on earning a degree so they could “secure” their future. As a result, instead of having money for a down payment on a home, Millennials are saddled with massive amounts of debt that will take years — if not decades — to pay off.
Add to all this a shortage in housing, increase in interest rates, increase in healthcare costs, and fewer companies willing to provide full benefits, and you have a generation that’s being challenged when it comes to the American Dream of owning your own home.
Real estate will always be local and personal. So while agents should be aware of how larger trends might be shaping people’s views on homeownership, they should also keep in mind that any individual holds potential to be a client — no matter his or her age.