As more Millennials enter into the exciting world of homeownership, they seem to be gravitating toward the suburbs. In fact, almost half of Millennial homeowners live in the suburbs and the majority stay in the same city when they buy a home.
These are just a few of the insights highlighted in Zillow’s 2016 Report on Consumer Housing Trends, which looked at the home-buying preferences of Millennials -- now the largest generational group in the housing market.
Millennials made quite a splash in the housing market in 2016, accounting for 42% of all home buyers. In most cases, Millennials were buying their first home.
The generation as a whole took its time entering into the housing market, which makes these findings notable. Until now, it was hard to say where Millennials would actually purchase homes when they started buying.
While they may have postponed their plans to buy a home due to delayed marriage or financial reasons, that’s not so say Millennials didn’t dream of owning a home. On the contrary, Millennials associate homeownership with the American Dream and see it as a solid financial investment to a greater degree than Gen-Xers and Baby Boomers.
But compared to a generation ago, the median age of a first-time home buyer is higher -- 33 years old compared to 29. Once Millennials do buy a house, they skip the traditional starter home by choosing larger properties with higher prices. They pay a median price of $217,000 for a home that is about 1,800 square feet, Zillow noted in its report.
"Millennials have delayed home buying more than earlier generations, but don't underestimate their impact on the housing market now that they're buying," said Jeremy Wacksman, Zillow Group chief marketing officer.
Suburbs may change
As this huge generation moves onto their next phase of life, Wacksman says we can expect the homeownership rate to tick up and suburbs to change to suit their urban tastes.
“We're constantly learning about this young group of home buyers -- we're finding that they are more similar to older generations than many thought," he said. "Their views on community and homeownership are pretty traditional, and they don't all fit the urban stereotype you might have in your head."
Among other findings from Zillow’s report on Millennial home-buying trends:
- Millennial home buyers share many preferences with their grandparents’ generation. Members of both generations tend to choose homes with shared community amenities and consider townhouses at higher rates than other generations.
- Almost 50% of Millennial homeowners live in the suburbs, while 33% live in an urban neighborhood. Just 20% live in a rural area.
- Of the Millennial buyers who moved in the past year, 64% stayed in the same city and just 7% moved to a different state.