Younger Millennials: Purchasing Habits Like Their Grandparents
New in this year’s report, the 2019 Home Buyer and Seller Generational Trends, is the segmentation of Millennials into two cohorts. Younger Millennials, buyers aged 21 to 28 years, made up 11 percent of all home buyers in 2018, surpassing the Silent Generation as a buying group. This generation was born between 1990 and 1998, and had a median age of 26 years. Fifty-four percent were married couples and 20 percent were unmarried couples, larger than any other generation. Seventy-two percent of Younger Millennials had no children living at home and only six percent purchased multi-generational homes.
Younger Millennials had the second lowest median household incomes at $71,200, surpassing only the Silent Generation, and 86 percent were first-time buyers (the report did not include this generation in its sellers section as there were not enough responses). Fifty-eight percent of Younger Millennials rented an apartment or house before purchasing their home. More than other generations, 30 percent lived at home before purchasing, 17 percent with parents or friends without paying rent, and 13 percent at home with paying rent. In comparison, only 14 percent of Older Millennials with lived at home previously. Two thirds of Younger Millennials (60 percent) purchased for the desire to own a home of their own.
The majority (94 percent) of Younger Millennials purchased previously-owned homes. Eighty-one percent purchased detached single-family homes, and 10 percent purchased townhomes or row houses, equal to Silent Generation buyers. Forty-nine percent purchased in the suburbs and 21 percent in rural areas, equal to Younger Boomers. They moved a short median distance of 10 miles from their previous residence. Seventy-one percent said the convenience to a job was an important factor influencing their neighborhood choice, followed by affordability of homes and quality of the neighborhood at 57 percent. Younger Millennials, Older Boomers, and the Silent Generation are the most likely to say they purchased to be near friends and family.
Younger Millennials purchased the lowest priced homes at a median of $177,000, indicating that inventory constraints and affordability impacted this generation more than others. They purchased the smallest homes at a median square feet of 1,600. Only 50 percent of Younger Millennials used a conventional loan to finance their home and 27 percent used an FHA loan. Commuting costs were important to this generation more than others at 40 percent. This generation was the least likely to say they did not make compromises on their home purchase, and often compromised on the price and condition of the home. Their expected tenure in the home was the shortest at 10 years, equal to Older Millennials and the Silent Generation. Of any generation, Younger Millennials were the most likely to purchase a home through a real estate agent or broker at 92 percent.