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We have often gone against the grain to promote the fact that Millennials have a stronger belief in homeownership than previous generations. Some have strongly disagreed. Well, a new study from the National Association of Realtors (NAR) found Millennials now account for the greatest market share of recent home purchases.
NAR’s Home Buyer and Seller Generational Trends Study for 2014, revealed that Millennials comprised 31 percent of recent purchases, leading all other age groups. Here are the percentages for other generations:
- 30% – Generation X
- 30% – Boomer Generation
- 9% – Silent Generation
NAR chief economist Lawrence Yun explained:
“Given that Millennials are the largest generation in history after the baby boomers, it means there is a potential for strong underlying demand. Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people.”
Other findings from the report:
- 87% of recent buyers age 33 and younger said they consider their home purchase a “good financial investment”
- Millennials were most likely to have a simple desire to own a home of their own as their motive for purchasing
- The median age of recent Millennial buyers was 29
- The median income was $73,600.
- 87% purchased an existing home, and they plan to stay in their homes for a median 10 years.
- Younger buyers relied more heavily than older groups on real estate agents to help them navigate the process.
Millennials are in the market and recognize the importance of using a real estate professional to guide them to the closing table.
A recent survey by the PulteGroup revealed that the Millennial generation has a more optimistic outlook regarding the American economy than other generations. According to the survey, 54% of Millennials believe the economy is in better shape today than it was last year compared to only 41% of the total population.
It seems this optimism is impacting purchasing decisions as 74% of Millennials view now as an excellent or good time to buy the things they want or need. Jim Zeumer, vice president of corporate communications for the PulteGroup explained:
“No other cohort of adults is nearly as confident about their economic future as the millennials are right now. This is definitely a change, as millennials have regularly been viewed as the disenfranchised generation vastly affected by the fallout of the recession. But now, with an increased sense of optimism, this generation is starting to feel as though they have the resources available to lead the lives they want or expect to in the future.”
WHAT ABOUT HOUSING?
Specific to real estate, the survey indicated:
- 85% of Millennials plan to purchase a home in the future
- 49% plan to purchase a home in the next two years
- Of those planning to purchase in the near-term, 56 percent are current homeowners and 41 percent are renters
- 65% prefer spending more money on a home that is move-in ready compared to doing renovations
- 58% increased their interest in purchasing a home in the past year as the positive attributes of homeownership resonate with this generation.