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References
NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require a password.
This year, the share of Gen Z buyers and sellers aged 18 to 22 made up 4% of buyers and 3% of sellers. This shows a slight increase from last year. 30% of Gen Z home buyers moved directly from their family home to the homes they purchased for themselves. They purchased homes on the lowest median household income of $50, 400 and purchased the smallest properties (under 1,500 square feet). Location close to friends and family was the most important factor to Gen Z when purchasing homes.
Source: Home Buyers and Sellers Generational Trends (National Association of REALTORS®, 2023)
Characteristics of the Millennial Generation
Most US Millennials Finally Own Homes – and It’s Not Thanks to Their Parents (The Guardian, Aug. 18, 2023)
“Now, however, millennials have achieved something remarkable: they have become a majority-homeowner group. In 2022, the share of millennials owning homes increased to 51.5%, according to a RentCafe analysis of census data. Their home ownership rates increased dramatically even in expensive metro areas such as New York and Los Angeles.”
Millennial Home Buying Statistics and Trends (Rocket Homes, May 31, 2023)
“30% of Generation Zers are currently saving to purchase a home, 8% expect to inherit a home in the future and 7% don’t expect or plan to ever own a home7. 33% of millennials are currently saving to purchase a home, 7% expect to inherit a home in the future and 13% don’t expect or plan to ever own a home7.“
Meet the Average American Millennial, Who’s a Parent and Homeowner with a Net Worth of $128,000 and Hoping for Student-Debt Relief (Business Insider, May 30, 2023)
“While many millennials have managed to buy a home, they have been slow to fill them up with children. As of 2018, 55% of surveyed 22- to 37-year-old millennial women had given birth to a child, according to a Pew Research survey that spanned both Gen Z and millennials, compared to 62% of Gen X and 64% of boomers at the same age.“
Generation Gap: What It Is and Why It's Important to Business (Investopedia, Jun. 3, 2022)
Born between 1981 and 1996, millennials have always known cable TV, pagers, answering machines, laptop computers, and video games. Technological advancements in real-time media and communication have driven their expectation for immediacy. They are the generation that bridges the gap of growing up in a world before and after the Internet.
Younger Buyers and Home Ownership
Many from Younger Generations Don’t Expect to Become Homeowners, Redfin Reports (Investopedia, Sep. 7, 2023)
“About one-third of Gen Z and millennials said they can’t afford monthly mortgage payments, and more than 30% said mortgage rates are too high. The average interest rate on a 30-year, fixed-rate loan was 7.18% as of the end of August, up from 5.55% a year ago and 2.87% over the same period in 2021, according to Freddie Mac.”
Welcome to the “Nepo” Housing Market: 40% of Homebuyers Under 30 Get Family Money to Cover Their Down Payment (Fortune, Aug. 28, 2023)
“In the United States, we’d like to think of ourselves as a place where anybody can make it, like where you’re born or the family you’re born into doesn’t matter. But that’s increasingly not becoming the case,” Fairweather said, “because of how expensive homeownership is and the role that homeownership plays in terms of wealth accumulation.”
Is It Possible to Buy a Home in Your 20s? Yes, but Only with Some Help (The New York Times, Aug. 5, 2023)
“Good old-fashioned saving is generally not enough to afford a home in your 20s. That is especially true for young people just starting out in their careers. Those who do manage to buy before 30 often get help from family or have high-paying jobs. But some are finding other paths to homeownership by settling down in lower-cost-of-living areas or tapping into programs that help reduce down payment costs for qualifying buyers”
Working With Younger Buyers
Agent Strategies for Getting First-Time Homebuyers Across the Finish Line (HousingWire, Oct. 16, 2023)
Agents must work with first-time buyers to mentally get them past the current rate, which is certainly not going to last forever. We need to help them understand that they have the luxury of time. We’re not competing, and inventory out there is now up for some negotiating on things like pricing, inspection, and rate buydowns.
How to Best Serve Gen Z and Millennial Homebuyers (RealTrends, Jun. 7, 2023)
“If you want to reach millennial and Gen Z homebuyers, then you need to meet them where they are at. Start texting! Texting is easy and quick communication that feels low pressure. It allows you to easily send listing links and you can always call your clients for those detailed conversations later in the process.”
The Impact of Student Loan Debt (National Association of REALTORS®, Sep. 2021)
One quarter of student loan debt holders say their debt has impacted their decision or their ability to purchase a home (29%). P. 26
What Younger Buyers Want in a Home
Gen Z-ers Are Moving Out. Where Are They Looking to Buy Homes (The New York Times, Jun. 15, 2023)
“To conduct the study, researchers examined loan requests made by Gen Z borrowers as a percentage of the total number of requests made by platform users of all ages. Salt Lake City had the highest rate of Gen Z applicants, at 22.6 percent, said the LendingTree economist Jacob Channel, the author of the report. Up next were Oklahoma City, at 22.4 percent, and Birmingham, Ala., at 20.8 percent, followed by Indianapolis, Cincinnati, Louisville, Ky., and Minneapolis.”
Selling to Generation Y: What Millennials Want in a Home (Rocket Homes, May 23, 2023)
“Besides the costs of yard maintenance and renovations, millennials are also eager to avoid high energy bills. Homes with metal or cool roofs and energy-efficient windows are often sought by millennial buyers. By keeping the home warm in winter and cool in summer, these energy-efficient options reduce additional costs and maintenance that Generation Y doesn’t want to deal with.”
This is What Gen Z and Millennials Are Looking for in Real Estate (GO Banking Rates, Dec. 29, 2022)
“DeGisi said first-time millennial buyers are entering the market comfortable with the fact that their first home may not be their dream home. This understanding in a competitive market allows millennials to see home ownership as an opportunity to build wealth. As a result, millennials are more open to multifamily housing options, like condos and quadruplexes, as their first home.”
Top 10 Features for First-Time Home Buyers (National Association of Home Builders, Mar. 24, 2022)
A laundry room tops the list, rated essential or desirable by 83% of first-time buyers, followed by a ceiling fan and exterior lighting, each rated essential or desirable by 81%.
Books, eBooks, & Other Resources
100 Questions Every First-Time Home Buyer Should Ask (eBook)
Home Buying 101 (Audiobook)
Marketing to Millennials (EBSCO eBook)
Your First Home: the Proven Path to Homeownership (eBook)
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