Over the last few years, the percentage of Millennials who are entering the real estate market for the first time has grown. Millennials now comprise about 45% of home buyers according to Ellie Mae, a software company that analyzes mortgage data. That number jumped 3% just since 2016, and if the growth in the number of Millennial home buyers continues at the same pace, it’s likely that within two years they will make up the majority of home buyers nationwide.
Here are a few of the fascinating differences between Millennial homebuyers and the generations that came before them.
Millennials buy for dogs, not kids: In the past, the most common reasons given for buying a new home included relocation, new household formation and the birth of a child. But, with Millennials putting off marriage and family longer than the generations before them, what’s driving them to buy their first homes? According to a recent poll, the reason most given by Millennials for buying their first home (after desire for more space and the opportunity to earn equity), was their desire to have space for a dog.
Differences like these also impact the neighborhoods Millennials prefer to live in. Polls indicate that Millennials like walkable neighborhoods with plenty to do – neighborhood characteristics that dogs also appreciate. Check out this list of 10 best neighborhoods for Millennials and this list of Phoenix’s best places for dogs and people who love them.
Millennials want to be close to work: Numerous studies have shown that Millennials like a convenient, walkable lifestyle. A recent poll showed that 65% of Millennials want to be close to work but only about 25% of them are buying in urban areas. Instead, the vast majority prefer suburban lifestyles (perhaps because of those dogs) with at least some walkable destinations nearby.
Millennials like move-in ready or newer homes: As a general rule, Millennial first time homebuyers are similar to previous generations in that they don’t tend to have a lot of cash to spare. However, as homes have become more expensive their tight cash position has gotten even tighter. This means that for most Millennial buyers, there’s not much left over for post-closing renovations. These factors likely explain the fact that 48% of Millennials prefer new homes or fully renovated homes over the traditional first-time fixer upper.
What about Arizona Millennials? The percentage of Millennials buying homes in Arizona isn’t quite as high as the national average (perhaps offset by retirees), but at 26% of purchase mortgages they’re still the dominant share of buyers. In Flagstaff and Yuma, they represent 35% of buyers. Data from Realtor.com indicates that Avondale, Chandler, El Mirage, Gilbert, Phoenix, Tolleson, and Tempe are the areas most of interest to 25-34 year olds and already have a large number of Millennial residents.