Used to thriving economies and strong employment rates, baby boomers played a critical role in stimulating the housing market prior to the Great Recession, but the economic realities of the last few years have shifted the focus to Generation Y and real estate professionals are now looking to the approximately 80 million “Millennials” born between 1978-1995 to shape the state of the housing market for decades to come.
With this in mind, ERA Real Estate conducted a consumer survey to gauge attitudes toward homeownership among Generation Y. Key findings indicate that Millennials view homeownership as a future goal with nearly one-third of respondents already among the ranks of homeowners.
“Gen Y will be a key driver of the housing market, buying from baby boomers who are looking to retire and downsize,” says ERA Real Estate president and CEO Charlie Young. “It is important to understand what motivates Millennial home purchasing and what really matters to this group of consumers.”
Of the 32 percent of Millennial survey participants who own a home, more than 90 percent bought it because they wanted their own place or wanted to own something; possibly indicating a home purchase is a personal achievement — which is important to Gen Y.
Of the 68 percent of respondents who do not yet own a home, 64 percent view homeownership as a future goal and 53 percent believe it is a good investment. This indicates that the effects of the economic downturn are not deterring Gen Y from pursuing the American Dream of homeownership.
However, the recession and current unemployment rate of more than eight percent are influencing Millennials’ attitudes toward purchasing a home: 67 percent chose affordability as an important home characteristic.
When asked what best describes their idea of a home, 73 percent of respondents said a place with a family.
The survey also revealed that Millennials have specific needs when purchasing a home:
• A penny saved is a penny earned. In addition to valuing affordability, nearly 80 percent of Millennials find low real estate taxes to be very or somewhat important, indicating a desire for financial security.
• They need their space. Sixty-two percent of respondents value living space in a home, with 41 percent citing space for family and friends as important — perhaps indicating a focus on quality of life and family connections. Supporting the need for space, 48 percent want a backyard, 54 percent take the number of bathrooms into consideration and 39 percent would like a garage.
• Work/life balance is not just a goal but a necessity. Also a possible signal that Gen Y covets quality of life or work/life balance is the generation’s desire for living close to work (83 percent citing proximity to the office as very or somewhat important), friends (67 percent) and family (65 percent) and a good neighborhood (68 percent).
• Convenience trumps aesthetics. Nearly 70 percent stated built-in amenities are very or somewhat important to them, although the home’s style is not as much of a concern — only 26 percent marked style as very important, indicating Gen Y’s practical streak. Environmental friendliness does not appear to be a driving concern for Millennials, with just 57 percent reporting it as being very or somewhat important to them when making a home purchase.
“Our survey indicates that Gen Y clearly understands the long-term value of homeownership from a financial standpoint,” says Young. “Beyond that, Millennials view a home as a cornerstone in building a family and spending time with friends, not just a place to eat and sleep. For Gen Y, owning a home is the foundation for one’s life.”
For more information, visit www.ERA.com.