Millennials in Today's Real Estate Market

The Impact of Millennial Buyers on the Real Estate Market

Millennial is typically the term used to encompass the generation of people born between 1981 and 1996, and they have come of age during some of the most tumultuous economic periods since the turn of the century.

In the 2010s, younger Millennials came of age thinking that 3% mortgage rates and housing shortages were normal; older Millennials recognized what might be a once-in-a-lifetime opportunity to buy or refinance with money that was practically free after accounting for inflation.

Then the pandemic changed where people wanted to live and work, and monetary policies designed to forestall a recession stoked inflation. Excess demand, material and labour shortages, and major foreign wars got us to where we are today.

Many Millennials who aren’t already homeowners wonder if they’ll ever have the chance, as rising rents make it challenging to save for a down payment. At the same time, mortgage rates are threatening to hit 8% and an adequate housing supply is years away.

This economic inequality means that those who can afford to purchase homes are doing so, and those who can’t continue to rent, which will further exacerbate income inequality in the coming years.

Investment companies are increasingly buying up and renting out starter homes. This leaves millennials buying more expensive first homes than previous generations did. As a tech-savvy generation, millennials have changed much of the home buying process over the past decades.

How Millennials Are Changing the Home Buying Market

Millennials are dedicated to their devices, and for this demographic group, technology plays a central role in home buying.

Millennials are also around twice as likely to use their mobile devices in their search than older baby boomers are. Over half of millennials (59%) said they would be at least somewhat confident making an offer on a home they toured virtually, while 39% reported they would be comfortable buying a home online. Over 80% of millennials would like to view 3D virtual tours and digital floor plans when shopping for a home, according to a 2021 report from expertise at Zillow

 

Impact of Millennials on Modern Real Estate Trends
Millennial Buyers Influence the Real Estate Market

Communicating With Realtors

Millennials also differ from previous generations in terms of how they use tech to communicate with realtors. Various researches reported that millennials use text messages to express interest in a property, schedule appointments, and ask questions, while phone calls are usually reserved only for more urgent or pressing concerns.

Texting represents the most immediate back-and-forth line of communication.

Thus, agents are adapting to this demand for electronic communication, with 90% of agents communicating via text and 94% using email. Another 34% chat with clients through instant messaging.

Another digital impact is in how agents list homes. Tech-savvy millennials are leading agents and brokers to introduce features like livestreaming and video in lieu of traditional photographs.

Affordable Houses Close to Work

Millennials are the generation that is most likely to care about finding housing close to where they work: research suggests that 44% of those questioned listed commuting costs as very important when considering where to live, while 74% listed a convenient location in terms of their job as an important factor when picking a neighbourhood, and 58% listed overall affordability as important

The Influence of Millennials in Today's Real Estate Market
Millennial Buyers: Changing the Real Estate Landscape

Impact of Increasing Incomes

The desire for more deluxe digs reflects, in part, millennials’ delay in entering the housing market. They have waited longer for a home of their own, and now they want a place where they can stay for a good long time.

The 2022 Investopedia Financial Literacy Survey found that although millennials are the most confident generation when it comes to financial literacy, they are also the most stressed. Those surveyed are facing significant pressure to make major financial decisions, such as homeownership, at an early stage of their life. Rising costs, particularly in healthcare, and financial inequalities have only added to this anxiety.

Conclusion

Millennials have left a lasting impression on the housing market, and more changes may be on the way as this next generation of homebuyers enters the fray. Focusing on the positive impacts millennials have created is key to keeping that evolution in perspective. An emphasis on technology, for example, may result in a streamlined, more efficient home buying process. And more millennials moving to the suburbs could help balance out the effects of rising housing prices in urban areas.

Discover a plethora of investment opportunities and luxuriant real estate ventures with Apex Group. Our trusted team of professionals is determined to deliver the finest services in an effort to remodel the property landscape of Pakistan. 

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