No matter what creative adjectives you associate with the millennials or Generation Y’s, their importance to the housing industry is undeniable. They account for 22% of the US population, ranging in ages from 18-34. Since these Gen Y-ers are influencing the housing market more than ever the Angels RE Group wanted to find out more information.
The number of millennials living at home has increase by 4% since 2010, according to BloombergView. This means that around 17 million people, 26%, of Gen Y-ers currently are living with their parents. There are many potential reasons, such as debt or lack of motivation. In recent years a likely contributor was the lack of job opportunities for this generation. More recently the unemployment rate has dropped making jobs more available to Gen Y-ers. The increase in job availability will bring more money to the pockets of millennials meaning they could start looking for their own housing, as a renter or owner.
With this change, realtors should be aware of the their new clients preferences. According to Daily Real Estate News, those in Gen Y prefer a location that allows them to walk to places over driving. This suggests that they are willing to compromise space for a convenient location.
Now, will these “out-on-their-own” clients be renting or owning?
A big trend towards rent-to-own is becoming apparent as the rent option is more favorable due the harsher restrictions on credit for mortgage loans. However, banks might be starting a movement to ease some of these restrictions. In addition, banks have slightly reduced their mortgage rates. If this continues, more people could be motivated to start applying for mortgage loans, and with a lower mortgage rate, those with slightly low credit scores could be accepted.
No matter what reasons millennials have for staying home, there will come a time when they are ready to leave. Angels RE Group wants to be prepared.