This week's post has been contributed by Jennifer Riner from Zillow. As a homeowner myself, I found these homeownership statistics described below as very interesting. I personally moved from a 1 bedroom city apartment during my city days to a semi-rural area “bedroom” community for the cost of living and a family-friendly environment. Apparently, other millennials share the same mindset.
The days of the urban-dwelling, renting millennial are gone – somewhat. Increasingly, young people are shaping the way home buyers shop for their new digs, and their impact is substantial: According to the Zillow Group Report on Consumer Housing Trends, buyers under 36 years old make up half of today’s housing market, with millennials (ages 18 to 34) comprising 42 percent of today’s home buyers.
Zillow’s analysis of 13,000 homeowners, sellers, buyers and renters found nearly half of Generation Y homeowners choose to live in the suburbs rather than the urban core. Cost appears to be the driving force; real estate within the United States’ largest cities, while surrounded by enticing attractions and neighborhood comforts, is too expensive for many young buyers who want move-in ready homes with modern amenities – so they are branching out to the suburbs.
Millennials tend to seek larger, more expensive homes than previous generations, with a median price of $217,000 for 1,800 square feet – pricier than baby boomer homes and just 11 percent less expensive than Generation X homes. Fifty-four percent purchase homes with shared amenities, such as a community gym or pool. These preferences and the tendency to skip the traditional “starter home” make the suburbs the more economical choice for young people. And, suburban-minded millennials are shaping their new neighborhoods considerably, with 55 percent of all Generation Y homeowners viewing themselves as involved in the larger community. Meanwhile, a third of millennial homeowners still opt for the traditionally hip city lifestyle.
What’s more, millennial homeowners are a more diverse group relative to the average homeowner. Just 66 percent of Generation Y homeowners are white, compared to 77 percent overall, and 17 percent of millennial homeowners are Hispanic or Latino compared to only 9 percent across all age groups. These younger homeowners are also more likely to be black (10 percent) or Asian/Pacific Islander (7 percent) compared to the greater population of homeowners.
Millennials are having a significant impact on larger housing market trends. Take a look at the overall demographics and other statistics related to today’s home buyers:
Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.