As a young adult, I often think about the day when I will start hunting for my own home. I think about what it will look like, all the adorable furniture I might decorate it with and how big it will be.
I have never doubted that I will ever own a home. The thought of having my own home someday is something that comes without question, and this is true for many young adults as they think about their future. After many years of renting and dealing with irresponsible and shady landlords, the thought of continuing to rent is nauseating.
Facts show I am not alone in this desire to purchase a home someday.
Do millennials really want to buy?
A recent Forbes survey shows that millennials haven’t been permanently scarred by the recession. Among 18- to 34-year-olds, 72 percent say homeownership is part of their personal American dream and 93 percent of 18- to 34-year-old renters plan to purchase a home someday. Older renters are more likely to say they’ll never buy than these young renters are, according to Forbes.
Olivia Clatto, Google+ Coordinator at Veterans United Home Loans, just bought her first home at 22 years old.
“At first I was really hesitant about buying a house so young,” Clatto said. “After crunching the numbers and talking to professionals in the industry, I realized how much money I’d be saving and assets I’d be gaining. Homeownership is a tangible asset that guarantees the money I’m putting into my home is going to pay off down the road.”
Do millennials want something different than the traditional suburban home?
The Millennial Generation is showing different housing preferences than previous generations. A recent study finds that nearly 60 percent of millennials prefer a mix of housing choices and prefer to be near shops, restaurants, offices, and transit. Some analysts say that Baby Boomers may be growing concerned that they will have a tough time selling their suburban, larger homes due to the millennials’ differing tastes.
Even though it is likely that millennials will want more urban-style homes, it seems there will always be some demand for suburban homes…because regardless of the generation, there will always be that desire to raise a family.
What might be keeping young adults from entering the market?
Despite the positive attitudes that millennials seem to have about homeownership, younger buyers have been left out of the housing recovery more than any other age group, a USA TODAY analysis shows.
Depleted confidence, high unemployment, student loan debt and poor credit are some of the things that real estate agents, young buyers and industry researchers have cited as reasons for the decline in homeownership among young adults.
On the other hand, an article in Business Insider says millennials are buying expensive homes like never before, thanks to wealthy parents and the tech boom. That article also claims the younger generation thinks “houses are a safer investment than the stock market.”
It also appears that wealthy parents are going to play a bigger role in their children’s home buying decisions than any previous generation. A luxury broker in Los Angeles tells the Wall Street Journal she’s seen more parents buy homes for their children in the last year than in her whole career.
So, the question isn’t whether millennials will enter the housing market one day. Instead, we should be focusing on how different their taste in housing will be, where their money will come from and how affected they will be by unemployment, student loan debt and poor credit. In any case, it’s important to know the Millennial Generation—where they are coming from and where they want to be. Soon, they will be the ones driving the economy and the housing market.
Photo courtesy Tobyotter