Millennials aren’t the baby generation anymore. They’re owners and CEOs of companies and have started families of their own. Millennials currently make up the most significant share of homebuyers in America. Still, many of the middle- and lower-class people of this generation find it challenging to enter the housing market.
This article explores how millennials have navigated the housing market with higher housing prices and more debt than ever. We also look at those with self-earned and generational wealth and what houses they tend to buy.
Renting and Owning
The trend until now has been that the younger generation prefers to rent and keep their options open in case of a sudden job change or relocation. This isn’t true for millennials in 2021.
More millennials have started buying into the housing market to start families or start building their wealth. The generation has lived through two housing market crashes. They’ve learned that their first house might not be theirs forever and have accepted this truth.
Still, wealthier millennials are rejecting the idea of buying a small house first and building wealth up slowly over time. Many are purchasing luxury real estate as their very first home. Because of this, these millennials are one of the most considerable driving forces of high-end real estate.
Because of the number of cash bids on real estate in the city, low- and middle-income buyers have a lot of trouble getting their offers accepted. They can wait months or even years to get a house. This means many millennials live with their parents in multi-generational households. Many also live with roommates or other families to cut costs and living expenses.
Most millennials can’t afford rent in the city without help and have a lot of trouble buying a house, which also contributes to why many tend to live with roommates or family. Wealthier millennials have shown they’re tired of waiting and saving up. They tend to buy massive luxury homes as their first house purchase. Many of these more affluent millennials also have generational wealth supporting them and their purchases.
Moving Out of Cities
A recent study by SmartAsset found that millennials are migrating out of major cities. They tend to move to states that don’t charge income tax, such as Nevada, Florida, and Texas. In fact, according to The Urban Avenue, Dallas is one of the most popular locations that shows the second-fastest job growth rate in the country.
Living in large cities is expensive, and buying a house there seems almost impossible for most millennials. The older millennials are at the age where they’re starting families and have to consider what that chapter of their life will look like.
Most millennials choose to move to suburbs and smaller cities. Even living off the grid has become more popular among this generation. It isn’t easy to buy a house in the city. Especially when most of them are out of your price range, and cash buyers take the ones you can afford before you can even blink. That’s why millennials are starting to move out of big cities like New York to smaller towns and suburbs. That way, they’re still close to everything they need but don’t pay such high living costs.
Sustainability
The younger generation has been educated about sustainability and protecting the planet. Most are passionate about leaving as little of a carbon footprint as possible. As these generations become significant players in the housing market, the trends have to follow.
Although millennials and gen Z are the biggest consumers in the US, they tend to buy more eco-friendly products and leave less of a carbon footprint. They’re also making the housing market adapt to them. So more eco-friendly houses are built using sustainable practices and materials.
The focus is on energy-efficient appliances, natural insulation, eco-friendly paint, and landscape design, including indigenous plants and natural irrigation and drainage. While these modifications and methods might cost more at first, especially for real estate owners, it saves money, energy, and the environment in the end.
Millennials are changing the ideal house into one that’s almost entirely off-grid, and the Earth is undoubtedly thanking them for it.
Conclusion
Millennials have changed the housing market in a few unexpected ways in the last few years. Most of the generation is struggling with finances and buried under debt and stress. Expecting them to buy expensive houses in the city is unrealistic.
Multi-generational households and living with roommates or other families is the norm for middle- and lower-class millennials. Bigger, more eco-friendly houses suit these households better. Millennials in this group also tend to go for homes in suburbs of big cities or states with no income tax.
The wealthier members of this generation are bulldozing their way into the luxury real estate market. They reject the ‘starter home’ that the previous generation had and go straight to buying luxury mansions.