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Millennials and the Housing Market

I started looking into buying a home when I realized that I was paying in rent for a two-bedroom apartment more than I would pay in a mortgage for a three-bedroom house with a yard in a better neighborhood! A few people told millennials and the housing marketme that I was perhaps a little too young to buy a home. I am an infamous millennial and recent trends have shown that adults my age have been putting off home ownership. But times are changing (again). In fact, research from Zillow shows that millennials are actually driving and diversifying the housing market across the nation.

 

Generation Y, those born between the early 1980s and mid to late 1990s, may be impacting the housing market more than you’d think. According to Zillow, half of all buyers are under the age of 36 and half of the sellers are under 41.

 

Additionally, this same generation is also driving a higher level of diversity among homeowners in the United States. About 77 percent of all homeowners in the US are Caucasian compared to just 66 percent of millennial specific homeowners. Seventeen percent are Hispanic, 10 percent African American and seven percent Asian or Pacific Islander.

 

But what I found most interesting was where millennials are settling into their homes, myself included. Nearly half, 47 percent to be exact, have purchased homes in the suburbs. At first, when I began looking for a home for my fiancé and I to put down our roots, I was determined to find a house within walking distance to the downtown Saint Petersburg area. Downtown has all of the best restaurants and nightlife, it’s right on the water, and there is always a new art show or concert to attend. I wanted to be in the heart of it all. But as our search went on, I started to realize some of the benefits of living just a bit further out. It seems that the majority of other millennial homeowners had the same epiphanies.

 

The most obvious reason for choosing suburbs over city life is of course the cost. Living in the heart of entertainment and action is always more expensive than living on the outskirts. In terms of amenities (whether they be included in apartment or condo developments or single family home perks), people can simply afford more in the suburbs. This is not to say however that millennials are completely shunning urban life. About a third of millennial homeowners still choose city centers as their home base, which is a higher percentage than any other generation today.

 

It’s true that millennials are currently playing a major role in our country’s housing market but it’s important to note that renting is still a very viable and popular option. Home ownership potential will depend on both the local market as well as income.

 

Have you noticed a trend within your transferees?

 

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MIKE CANNING
VP, Client Services

RICK CALANNI
VP of Business Development Northeast Region

 

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