How Millennials Shop for Homes

There has been a seismic shift in the realm of real estate, and the credit goes to the millennials.

While there is no denying that millennials are a little late to the party of buying a home as compared to the previous generations, they still form the largest share of the home purchasing market.

Arguably, buying a home was way affordable for the previous generations than it is now for millennials. However, they are still striving to make it happen, using well-thought strategies. 

Read on to find out.

They are going for smaller homes

As millennials have started to hunt for their own spaces, there is a stark difference in their purchasing patterns.

They are no longer into bigger homes as their parents were. Instead, for a millennial homebuyer, a home scattered across 1,700-1,900 square feet is more than enough.

Today’s generation is more about quality over quantity. In addition to this, many have fully embraced that less is more, and as a result, adopted the concept of minimalism. Walkability is the topmost priority for all the millennials now. It does not matter what size the home is; all they care about is whether space accommodates all their needs and requirements.

They are pushing themselves to suburban downtowns

Many Millennials have come to the conclusion that finding homes in the urban is just too heavy on the pocket. The dream of having their own space almost looks insurmountable! According to CityLab, urban homes are put at an increased value of about 25% more per square foot. When compared to suburban homes, this puts the houses in the urban core even more out of reach for the millennial home buyers. Therefore, they are left with no choice other than heading out to the suburban to get what they seek. 

Such a decision comes with a price in the form of a longer commute period or a less convenient spot of location. But, millennials seem to be less worried about it and welcoming it with open arms to become homeowners. They see it as a fast-track or a quicker gateway to homeownership. The luxurious urban condos no longer appeal to the Millennials. Modest spaces have taken the front seat in their priority list!

They skimp on the down payment

A generation that already has too much on their plate can find it hard to save the standard 20% of home’s down payment. And, rightly so! Today’s generation seems to be financially behind all because of the heavy student loans, increased costs of living, and comparatively dead wage scales. Moreover, Millennials living in metro areas can find saving for the down payment even more daunting. This is because of how expensive it is to reside in a metro area. Therefore, by giving their nod to putting down 20%, millennials are giving a heads up to private mortgage insurance. This seems convenient to many as it costs .5% and 1.5% of the total home’s value. As a result, this eventually gives them the liberty to pay less and expedite the process of homeownership.