Millennials Command the Largest Group of Homebuyers
By Scott Hillman
Some may be surprised by the fact that millennials are now the largest group of homebuyers in today’s market. As the father of two children in this age bracket, I’m not so much surprised as I am excited to share the research that finally backs up how “on track” millennials actually are.
According to the annual Home Buyer and Seller Generational Trends Reports, the National Association of Realtors found that 35% of new buyers in 2015 were millennials, up from 32% from a year earlier. Generation X, whose ages range from 36 to 50, ranked as the second highest group of buyers at 26%.
A few distinctive characteristics about millennial buyers that I want to point out from the survey:
- 84% believe home purchases are a good financial investment
- 79% purchase single-family homes in suburban areas
- 88% use the Internet and 87% use real estate agents during their home search
Despite a reputation as fickle or transient, these statistics show a different trend emerging among these young buyers entering the local real estate market. First, millennials display very traditional ways of thinking when it comes to buying a home, a much different trait than we’ve seen in prior years. They are not dismayed by the economic downturn suffered by previous generations and look for opportunities for stability with fixed monthly mortgage payments. A generation who faces financial obstacles with rising student debt, they are still saving or borrowing money for down payments, averaging around 7%.
Notably, these influential buyers are more willing to purchase an older home, lending their time and creativity for do-it-yourself renovations and custom decorations for their living spaces. While the vibrant urban life may be more desirable, recent trends indicate the need for more space at an affordable price is pushing younger buyers to the suburbs. Surveys show millennials also plan to stay in their homes for ten years, indicating they intend to live, work and play in desirable neighborhoods before becoming move-up buyers, much like the baby boomer generation.
In the Central Florida area, we have noticed this shift in the close-knit communities we serve, including College Park, Baldwin Park, Maitland, Winter Park and downtown Orlando.
I asked my son, Sam, whom is currently a realtor/analyst with Fannie Hillman, what he thought about this trend and he said, “I think a strong local economy and access to new, real estate-centric technologies has helped inspire confidence in the home buying process for twenty-somethings in the area.”
One advantage our company offers our customers is our interactive 3-D walkthroughs. Buyers can now tour a home before even stepping inside! Our clients have overwhelmingly told us this new technology tool has changed the way they buy a home, and we plan to debut additional options in the near future.
I forecast that as our local economy continues to strengthen and prosper with more jobs and younger people relocating to the Central Florida area, more millennials will take their first step to homeownership in the next two years.
Whether you are just starting out with your first home purchase, moving up to a luxury home, or deciding it’s time to downsize your space, our agents are happy to help find you the home that is right for you.
Scott Hillman is president of Fannie Hillman + Associates, a 35-year-old Winter Park-based real estate company specializing in residential real estate sales and producer of The Hillman Report, a semiannual look at residential real estate in Orange and Seminole counties, as well as Hillman Homes, a customized quarterly publication showcasing local luxury listings, editorial features, a dining and shopping guide, and cultural arts calendar. Read the latest issue on the company’s website (fanniehillman.com) or by calling (407) 644-1234 for a copy.
As featured in the October issue of The Park Press.