> Taking the Next Step
When you think about millennials and what their ideal living situation might be, what comes to mind? An urban loft in a former shoe factory with floor-to-ceiling windows offering a view of the downtown skyline, all within walking distance of the city’s trendiest bars and restaurants? A pricey Silicon Valley apartment with plenty of roommates to share the rent so everyone can afford to work on their start-up company? These living arrangements might be appealing to some millennials, but when it comes to buying a home, this group’s tastes are more conservative than you might think.
Millennials — defined as those born from 1980 through 1995 — mostly want single-family homes in the suburbs, according to the 2016 National Association of Realtors® Home Buyer and Seller Generational Trends study, which covers the period from July 2014 through June 2015.1 Only 17 percent of millennial homebuyers surveyed purchased property in urban or downtown areas, while 51 percent purchased homes in the suburbs.
That’s likely because the median age of a millennial homebuyer is 30, a typical age for settling down and having kids, said NAR chief economist Lawrence Yun in a press release.2
Millennials are similar to other generations in wanting a suburban home. What’s different is that for buyers ages 35 and younger, the median home purchased was built in 1984, compared with 1991 for all buyers, according to the NAR survey. A 1980s home isn’t appealing for its historic charm — another feature you might associate with millennials’ tastes if you’ve ever watched HGTV’s “House Hunters”.
More likely, the appeal may be that slightly older homes are less expensive and more affordable for first-time homebuyers. Millennials typically paid $187,400 for a 1,720 square foot home with three bedrooms and two bathrooms, according to the NAR survey. They spent a bit less than the median homebuyer across all age groups spent: $220,000. (Related: Buying Your First Home)
There’s nothing hip about the places where millennials are buying, either. According to a study by CoreLogic, a real estate data and analytics company, millennials want to buy in locations where homes are affordable and jobs are plentiful.3 The top three housing markets for this group are Utah County, Utah; Denver County, Colorado; and Kent County, Michigan. The top markets for millennial homebuyers tend to be in the middle of the country, where homes are generally more affordable. The least popular markets are some of the most expensive: Marin County, California; Westchester County, New York; and Honolulu, Hawaii.
Millennials are trendier when it comes to their home decor preferences, which include items such as reclaimed wood, brightly colored LED light accents, and smart home technology, but they also like traditional elements such as natural stone and handmade arts and crafts, according to a Washington Post article by Michele Lerner.4 They’re also interested in energy efficiency, comfortable and functional kitchens, outdoor living rooms, home offices, and home organization features, according to remarks from the National Association of Home Builders and Better Homes and Gardens at a January homebuilding show.5 In addition, the NAR survey found that millennial buyers want to be close to work, and they expect to stay in their homes for about 10 years.6