They’re eschewing buying a home in the suburbs like the plague. They prefer their first home to be as close as possible to the nearest coffee shop or “hip” restaurant. Space? Who needs it.
Who am I referring to? It’s not the millennial generation.
NAR Research released earlier this morning its 2016 Home Buyer and Seller Generational Trends survey. Contrary to some of the popular rhetoric out there, while millennials may choose to live in the city as renters, an increasing share of them are purchasing single-family homes in suburban areas.
The reasons are threefold: lifestyle changes, space and affordability.
Lawrence Yun, NAR chief economist, puts it best: “The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” he said. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out. Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households.”
What else did the survey reveal about recent millennial buyers? Check out some of the key findings below:
- Age – 30 years old
- HH income – $77,400
- Home size – 1,720 sq. ft.
- Year of home built – 1984
- Cost – $187,400 (millennials)
- Type of home – only 10 percent of millennials bought a multifamily home
- Median down payment – 7 percent
- 23 percent cited a gift from a relative or friend as a source of their down payment
- Millennials were most likely to cite student debt (53 percent) as the debt that delayed saving
- 87 percent used an agent to buy a home
- Millennials’ desire to own a home of their own as the primary reason for their purchase increased to 48 percent (39 percent a year ago)
Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission.