In the last few days, here’s what I have learned about millennial homebuyers from multiple surveys:
- A third of millennials plan to buy a home in the next year. (This is from a TransUnion survey.)
- 38% of millennials plan to buy a home in the next year. (TD Bank survey)
- 43% of millennials have a subprime credit score. (TransUnion)
- A quarter of millennials want advice from their parents on which home to buy, and 1 in 5 expect their parents to contribute to the down payment. (Bank of America survey)
- Millennials want banks to offer more resources and information online. (TD Bank)
- 85% of 1st-time buyers “would use a tool that automatically saves money from their paycheck for a home purchase.” (Bank of America)
That last 1 makes me chuckle because it seems like a transparent effort by Bank of America to sell some sort of savings account specifically for gathering down payments. Folks in Atlanta are most amenable to such a savings product, while people in New York City are the most likely to expect help from their parents when they buy a home.
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Millennials aren’t aliens
Back to millennials, that 18-to-34 age group that banks and bloggers are obsessed with. They do have a couple of key differences from earlier generations, but I believe their homebuying behavior will be similar to that of their parents and grandparents.
For example, Bank of America’s survey found that 52% of 1st-time buyers want a home in the suburbs. “1st-time buyer” isn’t synonymous with “millennial,” but, hey, I gotta work with the tools I’m given. 56% of experienced buyers wanted a home in the suburbs. There’s just not much difference between the 1st-timers and the experienced buyers in the preference for suburbs.
26% of 1st-time buyers wanted to buy a home in an urban environment, versus 20% of experienced homebuyers. That’s an appreciable difference. But I wonder how many of those experienced buyers, when they were younger, wanted to buy a home in the city. I’ll bet it was close to 26%. And then some of them did buy in the city, and then they got tired of hearing car alarms and car horns at night. So they moved to the suburbs, where they’re awakened at dawn by the droning of leaf blowers.
Just a little bit different
Millennials are different from previous generations in 2 ways that are apparent to me, the father of a 19-year-old college student: A lot of millennials have student loan debt that dwarfs what their elders had to pay, and they place less value on face-to-face communication — on being together in person, in the same physical space.
@AmyRosary and as an old who loves millennials I am eternally bored and annoyed by fellow olds weird animosity towards them
— julie lauren (@lila_engel) April 13, 2016
There have been quite a few surveys that indicate that student loan debt is delaying homeownership and marriage. Delaying, but not preventing.
As for the lack of face-to-face communication, I’m thinking not only about texting and social media, but about how my son and lots of young men have a way of getting together by sitting alone in their living rooms and logging onto a gaming console at the same time, donning headsets, and talking and playing games. And I wonder if this experience makes them hungry for living in the city, with the anonymous hustle-bustle of watching and bumping into strangers.
What do you think? Are millennials basically the same people that Boomers and Gen Xers were in the old days, or are they a cyborgs snapchatting across a huge generation gap?
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