Despite what you might’ve heard about millennials “killing” a number of industries, from diamond rings to sit-down chain restaurants, this group of adults is very interested in homeownership. The national homeownership rate climbed to 64.4% in the third quarter of 2018, which is a 0.5% increase compared to last year. What’s behind the rise in homeownership? Growing interest from millennials. Here are the 2019 millennial real estate trends you need to know about this year.
New Buying Strategies
Mortgage rates have returned to pre-recession levels, and they are currently sitting at a 7-year high. In 2019, some experts are predicting an additional 5% increase in mortgage rates, which means that buyers of any age are thinking twice before signing on the dotted line. Small increases in mortgage rates have a significant effect on purchasing power, so as a realtor you should be prepared to educate first-time homebuyers on the nuances of deals and what their money can buy.
Competition from Baby Boomers
Many baby boomers are now empty nesters and retirees looking to move from their current homes to their dream homes. As the purchasing power of millennials increases, these adults are going head-to-head with baby boomers for the same properties. In 2018, 30% of millennial homebuyers purchased homes worth $300,000 or more. This millennial real estate trend is expected to continue to grow in 2019 as competition intensifies. Interestingly, both demographics also have similar desires—walkable neighborhoods, smaller homes with luxury upgrades and modern amenities. As a realtor, you should be prepared for your baby boomer and millennial clients to duke it out for the same properties.
Many millennials grew up watching renovations and makeovers on HGTV, which means many of them are ready to invest sweat equity in their new home. Millennial homebuyers, on the whole, are more aware of the costs, work and implications of renovations than the previous generations. This is good news as interest rates rise and buyers should be prepared to settle for homes in need of TLC.
This generation grew up using the internet for research and information, so you should expect your millennial buyers to be very well-informed. Instead of showing your value through your basic knowledge, you should offer clients the information that they can’t find online—what neighborhoods are up and coming, what properties will gain value over the next decade and guidance through the negotiation process.
Prepare for Millennial Real Estate Trends with Homeland Title & Escrow
Homeland Title & Escrow offers a broad range of title services, including complimentary consultations for first-time homebuyers. To learn more about our services, give us a call at (410) 544-6700.