What Do Millennials Look For in a Home?

Millennials, members of the nation’s largest living generation, are growing up and investing in real estate. In fact, millennials now make up 56% of first-time homebuyers and are the largest age demographic of homebuyers generally. In short, millennials are beginning to shape the real estate market and our communities more broadly. Because of this, it’s important to understand the factors that drive millennial home buying. What does this generation look for in a home?

Affordability and Desirability

Almost half of millennial homebuyers have student loan debt, so it’s not surprising that affordability is a priority. However, many millennials are also starting families and therefore are unwilling to compromise on desirability. In order to balance these two priorities, millennials are seeking out unique pockets that can offer them the best of both worlds. Millennials are buying homes in safe, walkable areas with good schools that won’t further bury them in debt.

“Surban” Areas

As these homebuyers start families, they are leaving urban environments behind. However, they are not returning to the suburban havens of their parents’ generation. In order to find that perfect compromise of affordability and desirability, millennials are moving to so-called “surban” areas. “Surban” areas offer a mixture of urban and suburban features. They boast the walkable communities, good schools and green spaces of the suburbs with the cultural amenities and lower housing prices of urban neighborhoods.

18-Hour Cities

Millennials are looking for the cultural environments of larger cities but with lower living costs and more advantageous employment opportunities. Enter the 18-hour cities. Rather than migrating to first-tier cities like New York, Los Angeles, Boston and San Francisco, millennials are targeting places like Indianapolis, Milwaukee, Columbus and Indianapolis as appealing investment alternatives.

Midwest is Best

Right now, coastal cities offer astronomical real estate prices and competitive job markets. Because of this, millennials are moving away from the coasts in favor of “fly over country.” Midwestern cities present a more affordable and attractive housing market for this generation. Millennials are seeking out the lower-than-average housing costs and unemployment rates of Midwestern hubs, while also enjoying the cultural amenities those cities have to offer.

Millennials are dominating homebuyer demographics and bringing with them a complex combination of priorities and motivations. This young generation is starting to shape the real estate landscape. Understanding millennial priorities will help agents and sellers better market homes to these buyers.