The Millennial Generation made up of people born between 1980 and 1995, have become notorious for a number of things. A generation of approximately 90 million, millennials have been dragging their heels a bit when it comes to the real estate market. Today, however, they’re showing up more and more with quite a strong presence.
Millennials have been called “The Boomerang Generation” due to their tendency to move back in with their parents after college. They then tend to become renters for a few years, then finally at about the age of 29, homeowners.
Because of this trend, many wait until the age of about 29 to make a home purchase. So with many approaching this magical age of homeownership, it’s important to understand what matters to this influential generation.
#1 Location
One major driving factor as to why many millennials rent rather than buy is that they want to live in places that tend to be more expensive, such as city centers. When it comes time to buy a house, they may not be able to buy exactly where they were renting, but they’ll want to be close. Locations that are walkable, or within quick driving distance to a city center are very valuable to this generation. Millennials value day-to-day experiences over things. Meaning, the house itself really doesn’t matter as much as what they’ll be able to do while living there. This is why another major factor is proximity to the workplace. A long commute is an extremely unattractive factor for this generation.
#2 Affordability
Similarly to why location is important to allow for experiences, affordability is also necessary in order for millennials to be able to lead their lifestyles as they’d like. Let’s not forget that this generation is still deeply scorned by the recession, causing them to be rather thrifty and quite cautious when it comes to a home purchase. Throw in college debt and lack of employment options and you have a very frugal buyer (not so entitled after all).
#3 Multi-Functionality
While older generations sought out homes with luxury amenities and rooms with one specific purpose, millennial buyers are seeking more efficient homes that can be tailored to their changing needs. Millennials really value flexibility of space and multi-functionality. Rooms like a separate dining and living room are seen as a waste of space for this generation. They tend to look for function over formality. An open kitchen can be a multifunctional space not only to cook but to host family and friends as well.
Some things will remain the same from generation to generation, and that holds true with the rule of three/two. A home with three bedrooms and two bathrooms is still the most preferred for this generation. That third bedroom can sometimes come from a loft area of some sort if the space is right.
#4 Trendy Décor
With the rise in popularity of HGTV, Pinterest, and Houzz, millennials are at the top of their game with trendy decorations such as reclaimed wood. Millennials have the opportunity to know what is on trend at all times and imitate it in their own homes. What is much different about this generation, however, is that they don’t purchase décor or furniture with an investment mindset. Millennials appreciate more affordable home stores, such as Target and HomeGoods where they can find the styles they like at prices that allow them to change up their décor down the road should they choose to do so. This is a change from older generations who took a purchase like a traditional dining room table very seriously, knowing they would have it for decades to come.
#5 Energy Efficiency and Technology
This generation is much more aware of the impact that they have on the environment as well as their electricity bill. Gone are the days when homebuyers are looking for giant houses that require extensive heating/cooling efforts. Millennials are okay with a smaller space.
Customizable technology that allows them to control things from their phone, like a smart thermostat, is also very appealing. Home automation has come a long way over the years and
many of these products are aimed at this generation.
