Today, millennial homebuyers are the most dominant force in real estate. So what does it mean for these first-time buyers and EVERYONE else?
Millennial homebuyers were slow to start in the home buying game. But now that they’ve hit the market in full effect, they’ve quickly become the driving force in the marketplace—in 2016, they made up 34% of home buyers, the largest group for four consecutive years. Their decisions set the trends. Their preferences set the tone. And, beyond that, their approach to every aspect of home buying from down payments to renovations to specific wants, needs and neighborhoods has set the bar for all things real estate.
So, what does this new millennial homebuyer look like—and what trends are they driving? According to the 2023 NAR Home Buyers and Sellers Generational Trends Report:
- Less than ONE-THIRD submit offers with 20% down. A growing share, especially younger millennial homebuyers, opt for the minimum: just 5% down or less.
- 46% of millennial buyers aren’t clear on what they can afford, 70% are still first-time buyers.
- More than three in five search for both rental and purchase properties simultaneously, acknowledging the challenges of finding the right home at the right price. Renting provides some flexibility while searching for the perfect home.
- Millennial homebuyers are also creative with their down payments. Nearly one in three seek help from friends and family, and many combine funds from various sources.
- Almost HALF make multiple offers, and roughly two in five adjust their financial plans at the end, especially for their dream home!
Because rents in major urban markets are at an all-time high, it’s been tougher than ever for new millennial homebuyers to save for their down payment AND afford sky-high rents in the meantime. This has shifted the way millennial families think about their next steps—and the suburbs in general.
The big question: what are these millennial homebuyers looking for? According to a recent Redfin survey, the suburbs are still calling, with 40% of first-time buyers naming them their preferred location. 44% of millennial buyers want “near” or “outlying” suburbs, while 12% are open to small-town living. And the houses? Two in five are looking for a single-family home, while 36% are planning on a townhouse and 8% on condos.
Gen Z, born in the mid-90s to late 2000s, follows these millennial homebuyers. These tech-savvy individuals seem to be mirroring their older counterparts in their view of home buying. Redfin predicts, “These digital natives with social personalities are craving connected communities with shared amenities geared towards bringing people together.” We’ll need a few years to see how this unfolds, but for now, the spotlight remains on millennials and their continued impact on suburbia.
Suburban Jungle is an award-winning firm that specializes in moving families from urban to suburban. The company’s innovative “town first” approach helps homebuyers find the right suburb for their family based on personality and lifestyle, not just the house. Services are FREE and fully customized to each family and their unique journey. To learn more and to connect with a Suburbs Strategist, and find the place your family truly fits in GET STARTED.
