Millennials make up a significant portion of the present population. Covering the group of people born in the mid-1980s and mid-1990s, they are creative and technologically literate. This generation is now entering the housing market in higher numbers than before. According to the National Association of Realtors report, they make up the fastest growing group of buyers at present. Being a completely different generation from those that preceded them, it is not surprising that the Millennial home buying process is very different from what it was. Mortgage applications and listings are now online, shifting towards buying smaller homes. However, many similarities still exist between the two. Like previous generations, they too want to live in a safe, well-developed neighbourhood to raise a family. Millennials have taken a completely different approach to the housing market by making it more technology-oriented, changing the method of communication, and moving out of cities. This generation has impacted the housing market, and the movement caused by them in the market is a result of their career growth, increased income and paying off student loans.
Tech Oriented Approach
Millennials are people who look towards technology as an answer to all their problems. Not surprisingly, they do the same regarding the housing market. Searching for homes, viewing them, and checking the house and neighbourhood reviews are all things that are now done using technology. 99% of millennials find online information about the housing market. According to a report from Zillow, over 80% of millennials wanted 3D virtual tours and home plans when shopping for a home [2]. As digital advancements are being incorporated into the real estate business, there is a need for professional photographers and videographers to keep websites updated with housing pictures professionally. Real estate agents who do not keep up with such changes risk losing customers since 43% of homebuyers are millennials [3], and the number is only expected to increase.
Communication
A trend in millennial communication regarding real estate is that they like to text message. Whether it is showing interest in a property, setting up appointments or inquiring, it is mainly done via text messages and phone calls are made only for urgent matters. Giving in to the demand for electronic communication, 90% of the agents now communicate over text and 94% use email. Another feature that has become popular in communication is increased live streaming and videos to answer frequently asked questions and interact with potential buyers better. Also, communication with relators has become very limited since all the needed information is usually provided on the website. A realtor’s value comes in the form of negotiation skills and their capability to facilitate the home buying process now.
Mortgages
Previously, individuals looking for a home would go to a bank or realtor to learn about their mortgage options. The younger generation now goes to the internet to shop around for affordable mortgages. The mortgage experience over the internet involves quick digital communication and on-demand service.
Location
Millennials prefer to find housing closer to their workplace. 74% of people admitted to finding a neighbourhood near where they work for convenience [4]. This is because this generation values comfort and wants to avoid spending hours stuck in traffic after work. This generation is also moving out of the city to the suburbs in large numbers. 47% of millennial house owners live in the suburbs.
Increase in Income
Millennials generally wait longer to buy their first homes than previous generations. A huge reason is that they want comfortable luxury homes where they can easily build a life for themselves. Since they mostly think about residing in their homes for a long time, they put in a lot of effort to ensure the house they buy is high quality and meets all their needs. An increase in income further paves the way for them to afford such houses. Millennials had a median household income of $71,400 in the United States in 2018 compared to $70,700 in Generation X households in 2001. Since millennials value their comfort, as a result of receiving high salaries, they invest in vacation homes and luxury houses.
Conclusion
Millennials have left a lasting impact on the real estate market. Even though the home buying process is taking them longer than previous generations, they are still buying homes in large numbers, bringing changes to the market. By attaching importance to technology, the market becomes more streamlined, and the house-buying process gets efficient. They have also completely changed the way people interact with realtors. Generally, millennials’ approach to the home buying process is completely new and expected to impact the economy differently.
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