Millennial homebuyers have an edge on previous generations when it comes to purchasing their first home.
Millennials Don’t Want You to Design Their Home
Brian Wilson | Relationship Manager
First Republic Bank
3 min read
Conventional wisdom purports millennials not to be the homebuying type. However, in 2017 they represented the largest share of homebuyers in the U.S. A closer look at the data reveals not only that millennials are buying homes, but also that they have a unique set of buying habits precipitated by their relationship with social media, data and technology.
For millennials, space isn’t about square footage — it’s about breathing room.
Scroll through your social media feed and it’s easy to see why studies show that millennials value experiences over material possessions. You’re more likely to see groups of friends at a concert than someone showing off a new car. This mentality is also true for the way this group buys homes. Rather than shelling out savings on large homes with master suites, millennial homebuyers prefer spaces where they can entertain family and friends — that is, places where they can create and share even more experiences.
In a profile on “the millennial homebuyer,” the National Association of Home Builders found that adults between the ages of 18-34 prefer large, open kitchens as opposed to separate dining and living rooms, a shift from what earlier generations looked for in a home. One buyer even calls out this difference, saying space in her new home isn’t about the square footage; it’s the “open kitchen and really big yard” with space to breathe and entertain.
How much can you comfortably afford to spend on a home? Try our home affordability calculator and find out.
Research also shows that when millennials buy a home, they’re making a statement about what they value. Roughly 32% consider themselves environmentalists, so they look for homes with smart thermostats and Energy Star-rated appliances. This demographic also places a premium on convenience — they’re used to transportation being summoned at the click of a button and packages delivered the same day they order them — and this translates into where they want to buy their homes. Recent data from the Urban Land Institute found that they prefer density, diversity, walkability and transit accessibility just as much in city centers as they do in suburbs. As a result, the older notion of retreating to the suburbs is less appealing — they want urban areas near cities without the city-center price tag.
The dream home is DIY.
Millennials came of age during social media when people (and brands) started sharing more DIY projects online. With social media and online courses, design has become democratized. That is, first-time homebuyers can see posts from friends and family and learn about their renovation experiences, while also educating themselves about how to design a kitchen, housing addition or entire home that reflects their personalities. A study from Better Homes & Gardens found that millennials overwhelmingly prefer DIY projects. Consequently, they feel more empowered to take on projects in fixer-uppers and are more inclined to turn a house into the home of their dreams rather than hope someone else has already designed it for them.
Instead of buying a home with the notion that it will have to last them for the rest of their lives, they are much more pragmatic about the fact that the house they buy today might not be the house that works for them in a decade.
Real estate information is more accessible than ever before.
Just as design has been democratized, so too has real estate data. Today’s prospective buyers can research historical information on the prospective property and potential neighborhood, and they can even crowdsource advice from current and previous residents. Where real estate agents previously had more access to exclusive information to property data through the Multiple Listing Service, now any prospective homebuyer can do their own research before they even set foot on a property. Homebuying today is more visual and accessible than perhaps ever before.
All of this means that first-time millennial homebuyers have an edge on previous generations when it comes to purchasing their first home. Access to more information, though, means it’s even more important for prospective buyers to do the appropriate due diligence. Trusted resources like First Republic can help homebuyers figure out which questions they should be asking when they’re thinking about buying a home. With increased access to data and technology, millennial home buyers aren’t just participating in the housing market; they’re helping to reshape the very way it functions.
A version of this article originally appeared on Quartz.
The views, opinions and recommendations in this article are those of the author and do not necessarily represent the views, opinions and recommendations of First Republic Bank.
