Only 14 percent of the Millennials and Gen Yers (37 years and younger) who purchased their first house in 2017 anticipate living in their new home for three to five years, reveals the 2018 Home Buyer and Seller Generational Trends Report from NAR. What’s even more significant is that a huge percentage (31 percent) plan to stay put for more than a decade, which defies the traditional homebuying trajectory and places additional pressure on inventory turnover.
-26% plan to stay in their home for 16 or more years
-16% plan to their new home for eight to 10 years
-5% plan to stay in their new home for 11 to 15 years
First-time buyers made up 34 percent of all homebuyers in 2018 and Millennials accounted for 67 percent of those, so economists are predicting that existing homes in the affordability price ranges to become an even scarcer commodity in the future.
Here’s a few more tidbits about the homebuying behaviors of Millennials.
*What motivates Millennials to buy their first home?
Nearly half (48 percent) of Millennials who purchased a home in 2017 did so because they wanted a home of their own. Twelve percent already owned a home but desired something bigger, while 8 percent cited their purchase as a result of change in family situation such as a marriage, divorce, or birth of a child.
*How much of a home are they typically able to afford?
The nationwide median price of homes purchased by Millennials in 2017 was $220,000. Sixteen percent of Millennials paid $200,000 to $249,999, while 12 percent paid $250,000-$299,000. Another 11 percent purchased homes for $150,000-$174,999.
According to data provided by the Orlando Regional REALTOR® Association, the April 2018 first-time homebuyer affordability index median home price is $201,450. Those who earn the area's median income of $39,755 are about 10 percent short of earning enough to qualify for a home priced at $201,450.
*What features/amenities do they care most about in a new home and why?
The majority (35 percent) of Millennial buyers nationwide who purchased a home in 2017 considered commuting costs to be the most important environmental factor in their selection of a home. Thirty percent looked at heating and cooling costs, and 25 percent regarded the presence of energy efficient windows, doors, and siding to be of paramount importance.
*What amenities do they look for in a neighborhood?
Millennials are most concerned about the quality (safety, schools, maintenance, etc.) of their new neighborhood, which was the driving factor in home selection for 65 percent. The second most important factor was convenience to their job at 62 percent following by affordability factors (49 percent).
*Do they prefer single-family homes or townhomes?
The vast majority (85 percent) of Millennials nationwide who purchased a home in 2017 selected a single-family home. Only 7 percent selected a townhouse, and a mere 1 percent bought a condo.