Following the 2008 crash, Millennials had opted out of buying houses. With economic instability, high unemployment rates, and mortgage regulations, many were unable to purchase starter homes. However, with the upswing of the market, millennials are finally starting to enter the real estate market. Many of these millennials are making up for lost time and skipping starter homes entirely. They are opting for forever homes instead.
Why Are Millennials Skipping Starter Homes?
During the time period when people initially begin investing in their first starter home, millennials were faced with poor economic conditions. Many millennials stayed at home, living with their parents for much longer than previous generations. While those that did venture out on their own, rented for long periods of time. Though unable to purchase homes, this gave many an opportunity to save their money and build their careers. Now with the improvements in the economy, they are skipping starter homes and buying larger and more expensive homes. This trend of skipping starter homes is likely to continue as more and more millennials finally reach a financial position to buy a home.
What Types Of Homes Are Millennials Buying?
USA Today reports that 30% of millennials that purchased homes this year, up from 14% five years ago. Nearly a third of these buyers skipped starter homes and instead went straight for trade-up and premium homes. These homes cost $300,000 or more dollars and tend to be much larger with 4+ bedrooms on average. This was especially true among older millennials aged between 33 and 37 who seem to be making up for lost time. After renting for most of their adult life, millennials are ready to set down roots in a permanent home.
What Are Millennials Looking For In A Home?
Millennial home buyers have many different needs than other generations. Though they are looking for premium homes, millennials are very much lifestyle buyers. They are much more focused on location and amenities than size. Millennial home buyers like being close to cultural centers, have modern fixtures, and are very interested in a home’s design and aesthetics. MIllennials are also much more interested in buying updated historic homes with lots of character, rather than suburban tract homes.
What Does This Mean For The Real Estate Market?
Millennials finally entering the real estate is very good news for sellers because there are more people interested in buying a home. This is also one of the main contributing factors to the stable growth of the housing market. The fact that Millennials are skipping starter homes is especially good for Boomers who are at an age now they are looking to downsize their larger homes for retirement. In Providence, this trend is ideal since many of the homes in the areas and with the aesthetics specifically desired by millennials are now in their financial reach. So it’s especially good news for people looking to sell in the historic neighborhoods close to the city centers.