Building materials manufacturers have many misconceptions about millennials and, for the most part, don’t see them as a customer worth pursuing. If you sell your product to homebuilders, it’s time to wake up to millennials. The manufacturers who help builders reach this market will step ahead of their competitors.
Millennial Housing Myths
“Millennials are dragging down home ownership” was the title of a recent CNBC piece. They are not the only ones giving millennials a bad rap. Researchers claim millennials don’t want to buy. They are free spirits that prefer urban living. They can’t afford to buy because of the weight of college debt. Few emerge from college with a full-time job. Most are marrying later, resulting in a delay in “settling down.” Are all these assumptions true? Not necessarily. Consider five things you didn’t know about millennials and home ownership.
The Truth About Millennials and Housing
1. Millennials do want to buy. Not all millennials are wanting to be life-time, renters. Recent research from Zillow proves it. Their research found that young adults are even more eager to own a home than older Americans. Young married couples own homes at a rate close to or above previous generations. Even more convincing is that single employed millennials are more likely to own a home than their demographic in the 70s, 80s or 90s.
2. Marriage does play a role. It’s true that Millennials are marrying later. This does take a toll on home ownership. However, it’s not because they are not interested in buying. It has more to do with not having two incomes makes it harder to save up a down payment and qualify for financing. So, while home ownership rates may look lower in some regions, Zillow researchers found it will catch up. In fact, they predicted that if millennials were marrying at the same age as previous generations, their rate of ownership would be 33 percent, one point higher than what it is currently. The conclusion? Once more in this demographic start marrying, home ownership will increase.
3. They want a balance of affordability and efficiency. Millennials have been called the greenest generation. They want efficiency and affordability, but they are not cheap. A recent survey from Pew Research found this generation is more likely to pay more for products that are responsibly made. They want to work for companies concerned about their environmental impact and they opt for public transportation and bikes over cars. What does this mean for housing? While they are concerned with what they can afford, this is balanced by their desire to decrease their environmental footprint. They are willing to pay extra for green features and homes built with recycled materials.
4. They want flexible living. A large home with a room for everything is often considered wasteful by this generation. They are looking for a flexible, efficient floor plan. A home office that converts to a game room is ideal. Large open spaces to accommodate entertaining are at the top of their lists. They love versatile outdoor space that can easily be used to host guests or just enjoy a relaxing evening.
5. They can qualify for a loan. It’s true that first-time buyers have had a hard time over the past five years. However, this year has seen that trend turn around, partly because Freddie Mac and Fannie Mae loosened lending guidelines and paved the way for three percent down mortgages. Mark Zandi, chief economist at Moody Analytics told CNN Money, “It’s already begun that millennials are going back into the market.”
Millennials make up a whopping 32 percent of home buyers. That’s the largest demographic in the market. Builders, architects and realtors are targeting this demographic. Do you have products that would appeal to the Millennial buyer? As more of this generation joins the home buying market, demand will increase for what they want.
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