It’s the American Dream. You grow up, get an education, find a good job, and buy your first house. Maybe it’s the house where you will spend your prime bachelor or bachelorette years as you build a career and get the feel of “adulting.” Or maybe it’s the home where you plan to make your life, the home where you will raise a family.
No matter whether it’s a starter home or a forever home, the fact is that young people are buying houses at a rapid clip. And in the process, these Millennial homebuyers are also changing the housing market. We’ll show you how.
A New Generation of Homebuyer
The Millennial generation is the largest we’ve ever seen, surpassing even the Baby Boomers in numbers and, increasingly, in buying power. And with that power comes a great deal of influence over the real estate industry today.
The fact is that Millennials, in many ways, are an entirely new breed of homebuyer, and that means that sellers and realtors alike need to understand what makes the Millennial tick. That includes understanding that Millennials, among all the generations of homebuyers, are by no means easy sells.
They often know exactly what they want, and they won’t stop looking until they find it, no matter how long it takes. Many are willing to spend a year or more searching for their ideal home. And if you’re a realtor or a seller, that means you’re going to need patience, strategy, and creativity to snag the discriminating Millennial buyer.
If you know anything about Millennials, then you know they’re the first generation of digital natives, those born after the ascendancy of the internet and the advent of mobile internet technology. These are buyers who have practically grown up with a mobile device in their hands.
So it should probably come as no surprise that attracting these buyers means making expert use of today’s tech. As a general rule, Millennials aren’t looking for antique fixer-uppers with a lot of character and need of some old-fashioned TLC. Rather, they want new homes with the latest technology built-in. At the very least, they’re looking for a place with excellent internet service and cell reception as well as smart home capabilities.
But it’s not just the home that needs to have all the bells and whistles when it comes to technology. They also want the home search and buying experience to be tech-driven as well. A 2019 study from the National Association of Realtors (NAR) found that 81% of Millennials had found their new homes from a mobile app.
The use of digital technology in the home search also enables discerning Millennials to envision themselves in their new digs, particularly through the use of home tour videos, 3D models, and even virtual and augmented reality (VR/AR) software.
The latter can be a terrific tool for closing the deal with Millennial homebuyers because VR/AR helps them simulate what life in their prospective new home would feel like, especially as they experiment with potential renovations, new paint schemes, and furnishings and décor. After all, Millennials already know what they like. These high-tech tools can help them envision how, with a bit of paint, a few accessories, or some minor renovations, they can transform an existing property into the space of their dreams.
The Millennial on a Budget
As precocious as the Millennial homebuyer may seem, and as discriminating and deliberate as their home search habits may be, there’s no getting around the fact that this cohort of buyers is still just getting started in life. They’re often at the beginning of their careers. They may have little or no credit and are even less likely to have the traditional 20% down payment at their disposal.
Many Millennials may be denied a home loan on their first try, either due to a short job history or insufficient credit. Because of this, Millennial homebuyers, unlike older buyers, often turn to their parents to cosign on a mortgage loan or help with down payments. And that means that selling to a younger homebuyer often means selling not just to one generation, but two.
Millennials are an especially attractive customer demographic for the real estate industry. Their numbers are immense and their buying power is too. Millennials know what they want and they’re often unwilling to compromise. They often expect a home that meets their needs today, a turnkey house rather than a fixer-upper, one with all the hi-tech bells and whistles. But meeting these needs alone may not be enough to capture the Millennial homebuyer, because you’re also likely going to be selling to the parents who are opening their wallets to finance their kid’s real estate dreams as well.