As the largest group of home buyers, millennials are shaping the housing market. And as the millennial generation ages further into the traditional homebuying stage of life, we are starting to see how this generation is unique in their home-buying process, wants and thoughts on purchasing a home. With all the different statistics about millennials, Revere Bank conducted its own survey to decipher certain millennial home buying trends.
Revere Bank Millennials Research
Revere Bank conducted a survey that sampled 118 millennials (people ages 18 to 39, as of surveying). A group of approximately 22 of the surveyed millennials also participated in focus groups, during which they discussed the survey questions in more detail. In total, four focus groups with five to seven attendees each were conducted. The sessions each lasted one to two hours and consisted of open discussion prompted from a list of questions based on the original online survey.
The respondents’ ages ranged from 18 to 39. Respondents ages 20 and younger made up 3 percent of respondents; 60 percent were in the 21-30 range and 37 percent were between the ages of 31 and 39. The participants were 46 percent female, 52 percent male and 2 percent other. Married participants represented 39 percent of the survey pool while 59 percent are single and 2 percent responded other. Only 15 percent of respondents were enrolled in a two- or four-year program for undergraduate or graduate school.
When looking at millennials’ average income, our participants’ incomes ranged from less than $24,999 annually to more than $200,000, with half of respondents’ incomes falling within the $25,000 – $75,000 range (annually). When comparing males’ and females’ incomes there was a significant disparity – almost half (48 percent) of male respondents’ incomes were between $50,000-$99,000, while the majority (65 percent) of females’ incomes were between $25,000-$74,999.
Findings: Millennial Home Buying Trends
Our study looked into millennial home buying trends. A significant number of participants were homeowners (46 percent), but a large portion (34 percent) were renters. A smaller minority (11 percent) of respondents lived with their parents or other family.
Many studies have found that millennials are bypassing traditional paths of living arrangements (historically: with parents then with roommates, a partner and finally with his/her own family). According to the LA Times article, More Young Adults Live with Parents than Partners, a First, from May 2016, more 18- to 34-year-olds (all millennials) are living with their parents or families than living with a partner for the first time in recorded history. These trends have resulted in the millennial generation being pegged the “Peter Pan Generation,” due to the perception that many are delaying (or have delayed) traditional rights of passage into adulthood (home ownership, marriage, children, etc.) longer than previous generations. Many attribute these delays to millennials’ lack of money with large amounts of student debt and not being able to afford to get married, which is when many people purchase their first homes.
“Millennials are delaying when they buy their first homes. Starter homes used to be purchased in a person’s mid-twenties, but now it’s mid-thirties. This trend is having an impact on mortgages and borrowing in the banking industry.” – Revere Bank Banker.
In contrast to those reports, however (and potentially because of the age difference in each), the Revere Bank study found that almost half (between 43 and 46 percent) of respondents were already homeowners. Only 4 percent of respondents said they never plan to purchase a home, regardless of financial well-being. Additionally, all but one of the respondents who are planning on purchasing a home intend to do so within the next 10 years. After those who already own their own homes, the second highest percentage (34 percent) of respondents were renters. Only a small minority (11 percent) still live with their parents or other family members.
While the LA Times study surveyed 18- to 34-year-olds, it is important to note that the Revere Bank study surveyed 18- to 39-year-olds. When comparing responses by younger millennials (ages 30 and younger) and older millennials (ages 31 to 39), the responses about home ownership differed wildly. The older group of millennial respondents had more than double (72 percent) the homeownership rates of the younger millennials (32 percent). This shows that while millennials may be delaying home purchases, they are not foregoing purchases altogether.