Many millennials have exited the market. Millions more, however, are itching to buy a home. Millennials, the generation born between 1977 to 1995 (Center for Generational Kinetics), number more than 83 million.
It’s rather challenging to paint broad strokes with a group of people this large. They are currently between the ages of 25 and 43, which makes pinning down their preferences, attitudes and lifestyle even tougher.
We do know who among them is in the real estate market and what this group is seeking in a home.
Millennials in the real estate market
Three of the top five metropolitan areas that Millennial homebuyers are flocking to are located in Texas – Dumas and Eagle Pass, number one and two, respectively and Midland at number four.
Hastings, Nebraska and Williston, North Dakota round out the top five, according to Ellie Mae’s Millennial Tracker.
We’ve all heard of the exodus from big cities to smaller ones or even rural areas and this seems to be the proof.
Here’s what else the Tracker tells us about the average Millennial homebuyer:
- The average age is 31
- 60% are married
- Average FICO score: 740
- The average loan amount is $211,050
- The average appraised value of the homes they are buying is $267,456
- Most (81%) obtain a conventional loan, with only 16% using a FHA loan and 1% a VA loan. Two percent of the loan types were “unspecified.”
What are they looking for in a home?
The 2020 Millennial Homebuyer Report found that the average Millennial homebuyer is seeking a home with about 1,700 square feet of living space.
“While these younger consumers may not aspire to have a McMansion, modern homes with new and different amenities are absolutely important,” according to Jeff Fromm, “expert on Millennials,” at Forbes.com.
The pandemic has changed not only where homebuyers are choosing to live but their preferences in homes as well. Millennials are seeking the same, what is now considered basic, amenities as older buyers.
They are especially focused on “… where they can establish a ‘home office’ or a ‘home school’ or both,” within the homes they are considering purchasing,” Allan Merrill, CEO of Beazer Homes, tells Fromm.
And, kitchens are still important. “Not necessarily smaller, but simpler, healthier, and smarter with as much visibility and natural light as possible,” according to Josh Kassing at BDMag.com (citing the National Kitchen + Bath Association’s 2020 Market Outlook).
The neighborhood is key to Millennials as well. “Our younger buyers are typically very interested in being outside,” Merrill continues. Beazer homes is concentrating on adding amenity centers, pools, a dog park, walking trail and/or “access to a park or open space,” to their new neighborhoods.
“After sheltering-in-place for four or five months,” according to Kassing, “and faced with growing families, they’re longing for more space—especially outside and not necessarily just for their kids.”
He goes on to state that more than 80% of the cohort are dog owners and space for the pooch is critical.
Deal breakers
If you hold a listing that you assume is ideal for a Millennial, make sure that the homeowner takes care of the following “deal breakers,” according to the Millennial Homebuyer Report:
- Mold
- Pest / Insect infestation
- Foundation issues
- Leaky roof
- Odd smells
Deal makers? Urge your listing clients with smaller homes with yards to create an office or homeschool space to appeal to the commute-averse Millennial. It can be as simple as using an extra bedroom or the attic.
Stage the backyard to give the Millennial buyer and idea of the lifestyle it affords.
How to reach these homebuyers
More than one-third of Millennials surveyed for the Homebuyer Report said that they will use a first-time homebuyer assistance program to help with their down payment.
The “4 Mortgage Options with Low Down Payments” Direct Response Report highlights down payment options as low as 3% down. Download this report and include it in your listing presentations. In addition, offer it as an opt-in on your website and free offer on your direct mail pieces.
Yes, it’s common knowledge that one of the best ways to reach this cohort is through social media. But it’s not a “one and done” method of communication. It requires consistency to make a difference.
To attract the attention of Millennials on social media:
- Post regularly
- Use clear, compelling photos featuring people like them
- Promote suitable listings with ads on Facebook
- Join Facebook groups and engage (as an everyday person, not an agent) consistently
- Use relevant hashtags
- Have the perfect listing for a Millennial? Create a single-listing website and share the URL on social media
- Highlight your best testimonials on your home page and sprinkle them throughout the rest of your website pages. Social proof is critical to Millennials.
Most of all, Millennials crave information on the process, from comparing mortgage rates to getting a mortgage all the way through closing.
And, you’re the perfect person to provide this information.
Send a postcard from the First Time Buyer Series to a targeted list of Millennials in your area.
Need help targeting a specific niche of buyers or sellers? Use our Demographic Search Tool to create the ideal list (it’s easy). Or call our support team for assistance at 866.405.3638!
PLUS: When you have time…here are some helpful resources we’ve made available to support your success.
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