As the millennial generation ages into adulthood, they are choosing the suburbs over urban neighborhoods
SEATTLE, March 8, 2017 /PRNewswire/ — Almost half of millennial homeowners live in the suburbs, and the majority stay in the same city when they buy a home, revealing their home-buying preferences now that they are the largest generational group in the housing market.
According to the 2016 Zillow® Group Report on Consumer Housing Trendsi, millennials made up 42 percent of home buyers last year, more than any other generation, with most of them buying for the first time.
Millennials, those ages 18-34, associate homeownership with the American Dreamii and believe that buying a home is a good financial investment, even more so than Generation X and baby boomersiii. But until recently, they were delaying homeownership, and it was difficult to know where they would actually purchase homes when they started buying. The median age of a first-time home buyer is 33 years old, compared to 29 a generation agoiv.
Here are some key findings on millennial home-buying trends:
- Almost 50 percent of millennial homeowners live in the suburbs, while 33 percent live in an urban neighborhood and just 20 percent live in a rural area.
- Of the millennial buyers who moved in the past year, 64 percent stayed in the same city and just 7 percent moved to a different state.
- When millennials become homeowners, they skip the traditional starter home by choosing larger properties with higher prices: They pay a median price of $217,000 for a home that is about 1,800 square feet, similar in size to what older generations buy.
- Millennial home buyers share many preferences with their grandparents’ generation, both choosing homes with shared community amenities and considering townhouses at higher rates than other generations.
“Millennials have delayed home buying more than earlier generations, but don’t underestimate their impact on the housing market now that they’re buying,” said Jeremy Wacksman, Zillow Group chief marketing officer. “As members of this huge generation start moving into the next stage of life, expect the homeownership rate to tick up and suburbs to change to suit their urban tastes. We’re constantly learning about this young group of home buyers — we’re finding that they are more similar to older generations than many thought. Their views on community and homeownership are pretty traditional, and they don’t all fit the urban stereotype you might have in your head.”
Millennials make up almost 30 percent of the population in San Diego and Austin, Texas. Los Angeles, San Antonio and Columbus, Ohio also have large millennial populations, over 25 percentv.
Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of economists and data analysts produce extensive housing data and research covering more than 450 markets at Zillow Real Estate Research. Zillow also sponsors the quarterly Zillow Home Price Expectations Survey, which asks more than 100 leading economists, real estate experts and investment and market strategists to predict the path of the Zillow Home Value Index over the next five years. Zillow also sponsors the bi-annual Zillow Housing Confidence Index (ZHCI) which measures consumer confidence in local housing markets, both currently and over time. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ:Z and ZG), and headquartered in Seattle.
i The first annual Zillow Group Report is the largest-ever survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about their homes – how they search for them, pay for them, maintain and improve them, and what frustrations and aspirations color their decisions.
ii According to the Q2 2016 Zillow Housing Confidence Index (ZHCI), almost 70 percent of millennials associate homeownership with the American Dream.
iii According to the Q2 2016 Zillow Housing Confidence Index (ZHCI), 65.5% of millennials believe buying a home is a the best long-term investment a person can make compared to 62.8% of Generation X and 64.1% of baby boomers.
iv From 2010-2013, the median age of the first-time home buyer was 33 years old. From 1975-1979, the median age was 29 years old.
v According to 2015 data from the Census Bureau.