Because of our sheer numbers, we millennials tip pretty much any scale we touch, whether it’s the housing market or the wine industry. (We’re drinking more of it, but we prefer the cheap stuff.)
That’s why Gen Y is either thanked or scolded for most major market moves. A year ago, millennials were “dragging down homeownership”; this year we’ll “make it easier for you to buy a house.” Either way, as the older tier of the generation rounds into their early 30s, millennial homeowners are turning out more than ever before.
And we’re a really weird brand of home buyer.
Millennial homeowners are saddled with obstacles no previous generation has had to face, like an average student loan debt per borrower that’s both monstrous and unprecedented. They’re also less romantic about the whole process than their predecessors — buying before marriage, owning for shorter periods of time, and flipping with gusto and success.
The country will soon get used to it. For the second year in a row, we represent the biggest group of home buyers in America, 32% of the market, according to a March 2015 report from the National Association of Realtors.
This number is only going to go up in the coming years. According to the 2015 TD Bank Mortgage Service Index, 50% of millennials say they are either “extremely” or “very” likely to buy a house in the next year.
“Millennials will have a huge impact on the housing market for the next decade, just because of demographics alone,” Nela Richardson, the chief economist for Redfin, told me. “So whatever a few of them do, there’s enough of them that they’ll make a big impact.”
What enough of them are doing is making home buying pedestrian. And, at least for our generation, that’s a smart move.
A Different Kind of Home Buyer
A more accessible job market, a later marriage age and the mammoth costs associated with a wedding have meant many new home buyers are putting a mortgage before a marriage.
Chantel Bonneau is a wealth management advisor for Northwestern Mutual and a Gen Y-er who bought her first condo by herself at 24. (Three years later, her second home purchase is in escrow.)
“A lot of millennials are delaying marriage and children by almost a decade, as opposed to people maybe 30 years ago,” she told me. “That just gives you a different phase of your life where you’re earning, you’re focused on your career, but maybe we don’t have all the same responsibilities as parenthood or marriage yet. So that creates this new decade of life for some people — it means life choices to postpone some of those other relationship decisions.”
It’s a life choice many are making. A recent Redfin study found that 38% of millennials have or would delay a wedding or honeymoon in order to buy a home.
That means several things; for one, millennials are looking to buy for utility and own for shorter periods of time — “they’re not really focused on buying the house that they’re going to live in forever,” Bonneau explained. For another, they’re looking at their purchases more as an investment than a place to live.
That’s affecting the kinds of homes Gen Y-ers are purchasing, Richardson told me.