Traditional thinking might tell you that those labeled “Gen X” - people who are in the family-rearing age of 35-50 would be the group to market to when selling a home. But Gen Xers homeownership rates have fallen more than any other demographic group.
But, there are roughly 75 million millennials, according to Consumer Reports, in an article titled, “The Real State of Real Estate," and those 18-34-year-olds are starting to go home shopping.
It’s a later age to enter the market than previous generations - millennials have lots of student debt, low credit scores and are paying high rent. The 2008 housing market collapse which left 5 million foreclosures and many homeowners upside down in their mortgages have created challenges for people wanting to purchase their own home.
Banks have loosened up a little since the time right after the economic crash, but they still want stellar credit. And federal guidelines have tightened up, too, requiring more proof, more documentation.
In 2013 and ’14, millennials were the top purchasing group, followed by “baby boomers” and then Gen Xers.
Millennials seek home ownership for:
- Wealth-building benefits
- To live nearby family and friends
- Short commutes
- Move-in ready
- Nearby shopping, food and entertainment
And it’s not just millennial couples that want to buy their own home. Singles want home ownership, too. Consumer Reports predicts that by 2025, as many singles will own their homes as families.
Homeownership as an investment
Inc. reports that services like AirBnB have turned family homes into more than simply a place to live, but potential money-making assets. A typical AirBnB host pockets more than $7500 per year. Tech-savvy millennials are likely to be the owners and the vacation renters through services such as AirBnB, VRBO or Tripping.
On January 1, Arizona’s new law went into effect requiring municipalities to allow short-term rentals with services such as AirBnB. That will make such opportunities even easier for those so inclined to take advantage of this new trend, and earn some extra money, too.
Cities can benefit, too. The City of Prescott reluctantly rewrote their regulations to accommodate short-term rentals, and as a result will now receive business license revenue and sales taxes. The City plans to monitor short-term rentals closely, using a service that tracks and reports online rental postings.