Who needs starter homes? Not millennials
August 16 2018
The 2007 to 2009 recession had a significant economic impact on millennials. Many were forced to take low-paying jobs that didn't necessarily play to their skills, causing these potential buyers to delay the dream of homeownership.
Instead, they turned to rental properties or simply stayed at home with their parents. But in doing so, they were able to bide their time, advance in their careers and watch their incomes and savings grow as the economy improved.
The Return of the Millennial Buyer
Now in their mid-30s, millennial buyers are entering the market in a big way. According to the National Association of Realtors, they accounted for 36 percent of homebuyers last year, up from 32 percent in 2013. What's more, they're skipping traditional starter homes and are opting for larger, more expensive options.
Starter homes typically range from $150,000 to $250,000, while trade-up and premium properties average around $300,000. So far this year, 30 percent of millennials bought homes in the premium price range and above, up from 14 percent in 2013.
Getting married and starting families are two significant factors in this trend. As forward-thinkers, millennial homebuyers know they need more space than the typical starter home may provide, so they're focusing on larger homes where they can raise their families.
In fact, older millennials are buying larger homes than their predecessors did at their age. Nearly one-third of buyers age 33 to 37 bought four-bedroom homes from 2012 to 2016, compared to only 24 percent in that age group in previous years.
While a nationwide shortage of entry-level homes does play a role, many buyers are opting for more expensive homes for their prime location and upgraded amenities like large kitchens and yards.
What are you doing to market to millennial buyers? Get in touch today if you'd like to discuss current homebuying trends.