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 Trends, 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 Dream and believe that buying a home is a good financial investment, even more so than Generation X and baby boomers. 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 ago.
The new AudienceSCAN study showed 32% of Americans planning to move are aged 25 to 34.
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.
Moving and storage companies can target Potential Movers with ad campaigns that reflect what generations want in their next moves. Knowing the desires of each generation is crucial to nailing the target audience. The AudienceSCAN survey showed 39% of Potential Movers took action after watching TV commercials in the past month.
"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."
Showcasing suburban dreams in ads could help Potential Movers relate more easily to what local marketers are selling. The AudienceSCAN study found 37% of Potential Movers took action after opening direct mail from their mailboxes in the past month.
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 percent.