Millennials as a generation have good reason to be excited about home ownership.
The real estate market might not be moving along at light speed right now, but a whole new generation of buyers is about to shake things up. Millennials are grown up now. They're out of college, getting married or even having kids. But what they aren't is typical.
Home buyers usually fall into one of few categories. There's the first-time buyer who wants to make a modest investment. There's the buyer who wants to upgrade. And then there's the seasoned pro who has owned a few homes, knows exactly what he's looking for and probably has the means to get it. The youngest buyers are usually of the first-time group. Right now, those are the Millennials. But they're not following their predecessor's footsteps, and that's good news for many sellers.
Millennials Have a Plan
Millennials are planning for their future, and they don't carry a lot of debt. That's a combination that's great for them, and for the real estate market overall. About 1 percent of new first-time buyers say that they have a plan and that they're following it to make home ownership a reality.
Bank of America says that compared to Generation X, fewer Millennials have put off a home purchase because of debt. And they're willing to make sacrifices, too. One thing that they aren't is easy to please.
They're not really kids anymore. Many Millennials have kids of their own.
They Aren't Interested in Starter Homes
There's a point when many renters decide that they've had enough of paying someone else with nothing long-term to show for it. They want a home of their own, even if it's imperfect. That's the opposite of the Millennial mindset. If you thought that this generation would enter the starter home market first, you'd be incorrect.
This age group by and large wants not just any home, but their ideal home. They want a place to put down roots to stay a while, and one that isn't riddled with imperfections that require lots of repairs and upgrades. This is a generation that's looking well into the future. When they buy, they intend to buy what they want. And it's not a pipe dream, either. They're doing their homework.
They're Prepared to Wait
Because Millennials know their own minds and aren't afraid to make sacrifices, they're overwhelmingly prepared to wait a while longer to get what they want in a home. That means it might be a little while before a major influx from this generation moves into the market.
But once they do, they don't intend to go in with no downpayment the way that some first-time buyers have in the past. Money magazine says that 59 percent of Millennials intend to pay their down payment from personal savings instead of looking for alternative financing with higher interest and PMI. And they're making sacrifices to get there.
For quite some time, Millennials have been viewed as youngsters. But they've grown up now, and they're making solid plans for home ownership. Once they get there, they intend to move ahead into the home of their dreams with minimal debt and a great interest rate.
You might not see a significant change in buyers for the immediate future, but this generation is still gearing up. They're saving, they're planning, and they intend to get their first home purchase right.
If you're looking to sell your home, either now or a while into the future, let eppraisal help. Get a free property valuation that shows the estimated value of your home plus information about how it measures up to others in the neighborhood. What you learn could help you upgrade to make it more marketable for a discerning Millennial generation.
