Millennials Home Buying Trends in 2023

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woman taking selfie with cardboard boxes in new home

Millennials have grown up in an ever-evolving technological environment and are adept at using it for their own benefit. When purchasing homes, this generation prefers digital features like 3D virtual tours and floor plans over traditional real estate agents. When selling homes people often prefer a fast property sale from sites like Sell House Fast Scot.

Though many millennials are struggling with student loan debt, becoming homeowners remains top of mind for them, and many factors are helping them realise this dream.

couple making plans in new home with cardboard boxes

1. They’re defying convention.

One of the major misperceptions about millennials is that they lack interest in homeownership, an achievement other generations embraced more readily. While it may be true that millennials have delayed other aspects of life, such as marriage and children, homebuying could still become one of their primary focuses and could significantly impact the housing market.

However many millennials are finding it challenging to purchase their first homes due to a combination of higher home prices, mortgage rates, and stagnating incomes that is undermining their financial security. A recent Bankrate survey about millennials showed that nearly half of non-homeowner millennials said owning one was outside their budget.

That doesn’t mean millennials don’t want to buy homes; they just require more time and savings in order to transition from renting to homeownership. Still, creative measures can help them reach their goal of home ownership.

First and foremost, millennials are employing technology to navigate the real estate marketplace. They use mobile apps to search for homes and online mortgages to save time and money; moreover, strategic purchases are often made by them in order to build up their credit score and improve their chances of qualifying for loans.

Some millennials are buying homes well past the traditional age for first-time buyers due to several key factors, including rising incomes, strong job markets, and the growth in remote work opportunities.

2. They’re Buying Their First Home

One of the greatest milestones for any generation is purchasing their first home, yet millennials are finding it increasingly challenging to do so compared to generations before them. They have built less wealth than their parents and postponed important milestones like marriage and having children until later; their homeownership rates have thus declined over time.

Mortgage rates were historically affordable enough that first-time buyers could purchase a house. Since the start of the pandemic, however, mortgage rates have skyrocketed and are no longer affordable to many would-be purchasers with many looking to quickly sell their homes before mortgage rates become even higher with UK brands such as Sell House Fast Scot.

Add to that, a shortage of housing is compounding the difficulty of entering the market. Homebuilders have been reluctant to increase production since the financial crisis, leading to an inventory crunch that makes entering it all the harder.

However, several factors have enabled some millennials to enter the job market successfully. Student loan pauses and stimulus checks have reduced monthly loan payments, while remote work has allowed for greater job mobility. Furthermore, living with parents has provided significant cost-saving opportunities while moving closer to work, where rents are often much more reasonable.

But these factors don’t guarantee they will be able to buy their first home. With baby boomers looking for smaller living quarters in later life and rising prices putting pressure on available properties for sale, millennials must compete against older generations for limited spaces on the market.

Since they face numerous challenges when searching for homes, millennials are taking more time and care when selecting one. When selecting their ideal residences, they favour quality over quantity, looking for Energy Star appliances and programmable thermostats as well as desirable locations where they can walk or bike to work.

Make sure to remember that millennials are more environmentally aware than previous generations, with climate dread being of major concern to them and seeking sustainable homes with features like high-efficiency boilers, well-sealed windows, and energy-saving lighting and appliances being key criteria for consideration.

3. They’re buying with their partner

celebrating young black woman waving keys to partner

Millennials have often been accused of lacking the maturity to successfully tackle life milestones like marriage and homeownership. Yet if you keep an eye on the real estate market, this generation is defying conventional wisdom; more millennials than ever before are purchasing homes together, which is an encouraging sign for the housing market overall.

Traditionally, couples could acquire mortgages under both of their names. While this approach could make sense for some millennials who possess lower credit scores, purchasing jointly may prove more cost-effective as couples can split both costs—both the purchase price and maintenance fees—more easily.

However, when the couple isn’t married, it can be more challenging to qualify for a mortgage loan. When this occurs, it’s common for one partner to sign a guarantee agreement in case the primary borrower cannot fulfil his or her obligations. This type of non-marital co-signer loan can be extremely helpful for some buyers.

As the mortgage market evolves, millennials are finding creative ways to purchase homes that suit them while breaking with tradition by not waiting until marriage before buying one. A recent study conducted by mortgage marketplace LendingTree found that millennials accounted for most home purchases across 37 of America’s major metropolitan areas.

This trend may have its origin in the fact that millennials are more likely than other generations to live with their partners, which in some instances creates a stronger financial bond, which makes agreeing on financial decisions easier.

As more millennials purchase homes, the market will become increasingly dynamic. This could mean new innovations in mortgage products as well as increased opportunities for first-time buyers. It is therefore crucial that homebuyers understand all their available options and understand all types of loans to navigate this process confidently and find their dream mortgage.

4. They’re buying for the future.

Millennials are seeking homes that feature modern features such as open floor plans and convenient amenities, as well as ways to use technology to simplify the homebuying process by using virtual tours and 3D floor plans to find their dream properties without physically visiting properties themselves. These innovations help millennials find what they’re looking for without needing to drive around looking at properties physically.

Millennials are becoming the dominant demographic in the housing market and shaping its landscape. Despite facing difficulties such as student debt, an unpredictable job market and high living costs, these buyers remain determined to purchase their first homes and establish roots despite entering later than their baby boomer parents did—and may soon dominate it all!

Owning a house for millennials is more than a status symbol or sign of wealth; it’s a lifestyle choice. Most opt to reside in cities because they provide easier access to jobs and social opportunities; therefore, urban areas tend to have higher rents than suburban neighbourhoods, yet even within cities, many millennials find it hard to afford homes. According to BuildZoom data, new home sales near city centres have now exceeded 2000 levels, yet remain 50 percent below those figures 10 miles out from the centre.

One of the key obstacles to home ownership for millennials is saving enough for a minimum down payment. Although millennials tend to be money savvy and prioritise savings as much as possible for their futures, sometimes this doesn’t suffice, and some put off plans to purchase real estate altogether.

Real Estate Witch’s recent survey found that 92% of those impacted by inflation remain committed to homebuying; their responses include sticking to a budget, buying fixer-upper properties, or postponing purchases altogether.