Over the past few years, especially in 2018, the housing market has seen drastic changes. From fewer homes being put on the market to increasing mortgage rates, the real estate market was a roller coaster last year. But despite the heavy changes last year saw, there is one generational group that has powered through: millennials. While many people see millennials as kids who still live in their parents’ basements, this generation has made a huge impact in the real estate world the last few years. So what can investors and sellers expect to see from millennial homebuyers in 2019?
Millennials Will Continue Buying Homes
Contrary to popular belief, millennials are buying homes. In fact, experts even say millennials are dominating the buying market. In 2017, millennials and Gen Yers accounted for about 34% of home buyers — and this number has continued to increase the past year. Millennials are now the biggest generational group to be buying homes. While today’s market isn’t necessarily favorable to first-time home buyers, millennials are making it happen. They’re more price-conscious than other generations, they know the value of buying a home, and they know what they want in a home. Whether it’s because they’re moving up in their careers, looking for a home for their family, or wanting a house for their dog, more millennials are buying homes than ever. So despite the buying prices being high, 2019 will continue to see more millennials buying homes.
There Will Be More Homes for Sale at Increasing Prices
The end of 2018 finally saw the inventory of homes on the market start to increase, which is expected to continue into 2019. While more inventory doesn’t necessarily mean good news for sellers, it certainly is good news for buyers. However, despite the predicted modest inventory growth, home prices and mortgage rates are expected to continue to rise. Unfortunately, this means fewer people will be able to afford a home. Because while mortgage rates continue to rise rapidly, income isn’t rising as nearly as quickly. So millennials and other generations will see more homes on the market, but affording a home will remain difficult. Saving up money for a big down payment and being able to afford monthly bills is something many potential homebuyers may struggle with.
We’ll See More Home-Buying Competition
As younger generations continue to age and move up in their careers, we’re going to see more people with purchasing power. And while this is a good thing, it’s also going to increase competition for buying homes. While 2017 saw 9.26 million people who owned both a primary residence and a second home, that may not be as easy to do in 2019. The competition to buy homes is going to be particularly evident between millennials and baby boomers. Both generations seem to seek the same price range of homes as well as similar amenities. Walkable neighborhoods and smaller home sizes are both popular wants among baby boomers and millennials. This means that there will not only be a challenge to buy a home, but it may also be more challenging to sell as well. Property investors and homeowners will need to figure out how to market their houses to both generations. Normally, sellers can focus on a primary buyer profile and stage their home to appease that one group. But in 2019, sellers will have to change their tactics and find ways to appeal to both millennials and baby boomers.
More Millennials Will Buy Fixer-Uppers
While it is true that most homebuyers want to avoid issues with their new homes, like the 34% of recent buyers who were looking to avoid plumbing and electrical problems, millennials don’t necessarily shy away from a challenge. Millennials are becoming more open to the idea of having to make renovations or repairs in a new home. This could simply be because they can’t afford a home without issues and have to settle for a home that needs some work. But some experts believe the increasing numbers of millennials buyer fixer-uppers is due to the popularity of home improvement shows. It’s no secret that millennials love their HGTV — and it could be the reason they feel confident enough to buy a home that needs fixing. Popular home repair shows have taught millennials what problems to look for, what the recent trends are, and even how to make repairs themselves. And with Home Advisor showing a basement remodel can offer up to a 70% ROI, making repairs and renovations can help millennials buy a house and fix it up to be more than it’s original worth. So 2019 may see more millennials buying homes and putting their creativity to work to fix them up.
Millennials are one of the most motivated and creative generations today. And with their knowledge and ambition, millennials will continue to change the real estate market with their buying habits in 2019.
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