Born between 1979 and 2000, “Millennials” also known as “Echo Boomers” or “Generation Y,” are key to today’s purchase market. Based on 2010 U.S. Census data, there’s approximately six million more Millennials in the prime “First Time Homebuyer” age group (ages 20 – 31) than there were Baby Boomers in the same age group in 1977! Because of the sheer size of this entire group – about 89 million total – Millennials represent an enormous first time homebuyer opportunity both today and into the future. So it’s important for any loan agents, builders, Realtors, and potential borrowers, to know a little more about them. After all, agents will want to lend to them, and other borrowers may be competing with them to buy homes.
According to research firms, Millennials are typically cautious when making large purchases – almost half consider themselves “savers,” and about 80% are bargain shoppers that stick within a tight budget.
With their practical economic outlook, obtaining a good deal on a home purchase may be a primary goal for Millennials. Smaller homes with stable financing options may be a good fit; and with the recent trend in favor of government financing, FHA loans may play a large role in their home financing needs.
Analysts believe that this is the most likely group to purchase a home in the next two years in comparison to any other age group, although many of them are still in college. They’ll start hitting the home buying market en masse in 2015, and by 2017 they’re in the peak time for home buying. Just in terms of numbers, this group is hugely important. They, unlike their parents, are choosing lifestyle over work style. They’re the ones that are likely to choose a home based on their ability to canoe on the weekends, if that’s what they do. They’re also choosing transit and close-in locations much more than their parents did, preferring urban locations or at least denser environments to the suburbs.
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