While home ownership was the norm for previous generations, millennials’ home-buying habits have changed the face of real estate. Unlike Baby Boomers and Generation X, millennials are not purchasing a home as young adults.
For starters, millennials are waiting longer than any other generation to buy their first home. They choose to rent for longer for a number of reasons. Home prices have risen significantly and student debt is higher than ever, making it more difficult for millennials to get a mortgage. In addition, fewer millennials live with a partner or spouse, a milestone that often comes before purchasing a home. Because they are waiting longer to buy a house, therefore having more income and a more settled lifestyle, millennials have all but eliminated the “starter home.” Past generations purchased smaller, more affordable homes at a younger age, then upgraded to a larger house as they grew their income and family. However, millennials are saving their money for a longer amount of time to buy a larger or more luxurious house when they do purchase real estate. Some millennials even choose to rent in a city for their primary residence and buy a vacation home as their first property. Millennials are also hitting life milestones in a different order than previous generations. Baby Boomers and Gen X usually got married before buying their first home, while more millennials purchase a house with a partner before saying “I do.” The reason? Higher home prices and larger amounts of student debt make splitting a mortgage with a significant other one of the only viable ways to own a home. Many younger couples value owning property together and sharing expenses over getting married. While previous generations valued large, fancy homes, millennials look for quality over size in a home. Giant houses with ornate interior design doesn’t appeal to millenials. Instead, they look for open floor plans and minimalist design in smaller homes. They also prefer a location with easy access to neighborhood amenities, eco-friendly features like solar panels, and fun pieces of technology like a smart home system. Finally, in their search for more affordable housing, millennials are flocking to suburbs and even “exburbs,” commuter communities that require a longer drive into nearby cities. However, they are being more selective about which of these neighborhoods they choose to live in. Good weather and jobs within the community are two factors that millennials look for. As the cost of living and home prices continue to rise, more and more millennials are choosing to hold off buying their first home or purchasing real estate in communities further away from city business centers. This generation is changing the way we look at home ownership to fit their lifestyle and the current economic conditions. |
Cecil Darren Frank - Toronto Real Estate AgentArchives
October 2019
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