If you work with first-time homebuyers, chances are, you’re going to be working with Millennials. Who are millennials? They represent the biggest generation in history and the biggest group of homebuyers in America. As a real estate professional, you need to understand the Millennial generation. In this article, we explore questions like: Who are Millennials? What influences their lifestyle? What are their desires and limitations when it comes to homeownership?
Who are Millennials?
The U.S. Census Bureau defines Millennials as being born between 1982 and 1996. Here are six things you need to know about the Millennial generation.
Millennials are numerous
The U.S. Census Bureau reports that there are currently about 72.1 million Millennials, which represents over one fourth of the nation’s population. The number of Millennials surpassed the number of Baby Boomers around 2010.
Millennials are diverse
According to the Brookings Institution, only about 56% of Milllennials are white, with approximately 14% of Millennials identifying as African American and almost 30% identifying as a “new” minority (i.e. Hispanic, Asian, bi-racial, etc.).
Millennials have unfavorable debt to income ratios
While this generation is still young, many have entered the workforce during a time of recession. The average Millennial salary is $47,034. The average Millennial owes around $40,200 in student loan debt. The average student owes around $12,700 in credit card and other types of debt. This makes purchasing property a difficult endeavor for Millennials.
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Millennials are educated
One third of older millennials (currently in their 30s) have earned at least a four year college degree, making them the best educated group of young adults in United States history (Pew Research Center).
Millennials are delaying marriage and children
Just 26% of millennials in the United States are married, compared with 36% of Generation X, 48% of Baby Boomers, and 65% of the Silent Generation at the same age. According to Pew Research Center, 33% have put off marriage or having a baby due to the recession.
Millennials rely heavily on technology
More than 93% of Millennials in the United States own smartphones, and 86% of Millennials say they use social media. 57% of Millennials also said that they would change financial advisors for a tech setting.
Millennial home buying trends and preferences
The trends among this critical demographic are clear. Although Millennials are burdened with debt, they have high aspirations. Millennial homebuyers want spaces that are efficient, in terms of use and energy. They are not interested in large, ornate homes in the suburbs, but would rather be in something small, flexible, personalized, and close to restaurants, shops, and recreational space. In a real estate broker, they are looking for top-notch customer service first and foremost. They also expect to be able to communicate with you via text, email, and social media.
So, who are Millennials? As a group, they are significantly different than the generations that preceded them. Millennials are racially diverse, more educated, more technology driven, less likely to be married, and less likely to have children—but more likely to have enormous debt. They also expect a high level of customer service throughout the homebuying process. Understanding the characteristics, desires, and limitations of this generation is the first step to achieving success with Millennial real estate clients.
