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Millennials: Optimistic & Ready to Buy

Millennials: Optimistic & Ready to Buy

We believe that 2014 will be the year that Millennials re-enter the housing market in a big way. Because of that, we will be dedicating our blog posts each day this week to a better understanding of this generation. – The KCM Crew

YoungFamilyHouseA recent survey by the PulteGroup revealed that the Millennial generation has a more optimistic outlook regarding the American economy than other generations. According to the survey, 54% of Millennials believe the economy is in better shape today than it was last year compared to only 41% of the total population.

It seems this optimism is impacting purchasing decisions as 74% of Millennials view now as an excellent or good time to buy the things they want or need. Jim Zeumer, vice president of corporate communications for the PulteGroup explained:

“No other cohort of adults is nearly as confident about their economic future as the millennials are right now. This is definitely a change, as millennials have regularly been viewed as the disenfranchised generation vastly affected by the fallout of the recession.  But now, with an increased sense of optimism, this generation is starting to feel as though they have the resources available to lead the lives they want or expect to in the future.”

WHAT ABOUT HOUSING?

Specific to real estate, the survey indicated:

  • 85% of Millennials plan to purchase a home in the future
  • 49% plan to purchase a home in the next two years
  • Of those planning to purchase in the near-term, 56 percent are current homeowners and 41 percent are renters
  • 65% prefer spending more money on a home that is move-in ready compared to doing renovations
  • 58% increased their interest in purchasing a home in the past year as the positive attributes of homeownership resonate with this generation.

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4 replies
  1. John Hauber
    John Hauber says:

    Lawrence Yun who is chief economist for NAR states in his latest article that their data shows that first-time buyers are a shrinking share of the market, only 27% of the buyers, compared to 40 percent in a more normal market. It’s not that young households don’t want to buy. It’s that desire is not matching up with their ability. Many young households are saddled with student loan debt while job creation and wages have been heading up slowly. And the qualified mortgage rule that took effect this year to ensure lenders don’t make bad loans won’t help, since it tightens how much student loan and other debts applicants can carry.

    Reply
    • Steve Harney
      Steve Harney says:

      John –

      Not all Millennials are first time home buyers and not all first time buyers are Millennials.

      NAR recently revealed that Millennials accounted for a greater share of all home purchasers than any other generation.

      Check out tomorrow’s blog for more information from the NAR report.

      Reply
  2. Jerry B.
    Jerry B. says:

    Investors have dominated the buying market. I think we are going to start to see first time home buyers making a larger presence in the market with the talk of increasing interest rates. I do however agree that many home buyers are out-priced in the market. Income has not moved with the housing pricing increases.

    Reply

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