Here’s how Millennials are creating trends in the home buying market
Millennials are adults. They have reached the age where they buy houses and have a huge impact on the housing market. It is estimated that they now represent almost half of home buyers. Recognizing that older homes often need renovations, repairs, and have higher monthly expenses, millennials are turning the key to newly built homes.
As a significant proportion of the population purchasing newly constructed homes and incorporating a resort lifestyle into their homes, Millennials are setting home trends. William Olson, Senior Vice President and Division Director for Estrella by Newland, said he has seen an increase in smart home concepts.
“Millennials want everything from their refrigerators to lights to be integrated and connected wirelessly,” said Olson. “We have also seen our builders within Estrella receive requests for energy efficient features that help reduce both their carbon footprint and their energy bills each month.”
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These features can include high quality insulation, doors and windows, energy efficient appliances and HVAC systems. Even though a high-tech, energy-efficient home seems expensive, millennials also need it to be affordable.
Olson adds, “They achieve this by compromising on size because they’re okay with a smaller footprint home – as long as they’re functional. ”
They want open concept homes with an office and plenty of space for flexible space that can be a gym one day and a craft room the next. But interior space is not the only goal; they also want an outdoor space. Being able to entertain themselves, sit by the fireplace or enjoy a glass of wine outside is a feature at the top of their list, and even more so is the easy accessibility.
“They want to blur the line between indoor and outdoor space so that large glass patio doors that can slide or fold up really open up the house and make it appear bigger,” Olson said.
Millennials are taking advantage of near-historically low mortgage rates to afford these homes full of amenities. “Even though house prices have gone up about 25%, millennials are wisely capitalizing on rates that have been around 3%,” said Mike Berte, president of AmeriSave Mortgage Company.
Once deterred by debt and a down payment, Millennials are finally able to buy a home. After college, known as the boomerang generation, millennials returned to their family homes and lived with their parents to save money and pay off student debt. Spending time at home, reducing debt, and saving money helped Millennials qualify for loans and make a down payment.
“Some millennials were put off by their savings account balance because they thought they had to put down a 20% down payment,” Berte said. “While this is ideal, it is not a compromise. There are other options for the home buying process this will allow them to close the deal.
Some put in as little as 10%, and while that translates to a higher private mortgage insurance (PMI) rate, it also allows millennials to start building equity. To get into this equity building game, the days of going to a bank to qualify for a loan are long gone; now millennials are doing it online. With AmeriSave’s Lock and Shop option, home buyers have the ability to shop for their home with the peace of mind of knowing not only what they can afford, but also the freedom to focus on the home. search for the home of their dreams without worrying about a fluctuating rate.
In addition, in today’s market, many young buyers are losing business because of other cash offers. While they might not have any money to give, there are other options they can take advantage of to attract sellers, one being a certified pre-approval letter. Being known as the second best thing to a cash offer, it gives buyers a competitive edge over other buyers.
Overall, technology has simplified the mortgage process and professionals are able to pass additional savings on to their clients. Its on-demand capabilities allow millennials to get started on their first homeownership path at a low mortgage rate with just a few clicks. Once millennials qualify for a loan, this tech-savvy generation is not taking the traditional route of home shopping; instead, they search for options online.
Once millennials qualify for a loan, this tech-savvy generation is not taking the traditional route of home shopping; instead, they search for options online.
Brandon La Vallée, Get your nest Founder and COO, said “Millennials are used to using an app for everything from calling a cab to ordering food; why would buying a home be any different? “
But they don’t just search for neighborhoods and look at kitchen photos; millennials will even buy a home online. According to LaVallee, with all the data at their fingertips and our technology to help them along the way, millennials are armed and ready to act quickly once they find a home they want to give. We make this process as quick as possible which also gives them an advantage.
“The real estate market has a low supply of housing, and with demand at an all time high, this makes it a very competitive market. The traditional home hunt was frustrating, visiting homes to lose to a higher bid, ”LaVallee said.
Now online, millennials can bid faster and get ahead of other homebuyers in the market, all with the push of a few buttons.