How Are Millennials Buying Homes? 4 Strategies That Work

As we’ve discussed in the past, millennial homeownership rates are much lower than the average among total US adults. The reasons, of course, are complicated. From stagnating wages to massive competition to skyrocketing home prices, many millennials feel the pinch as they enter the housing market. 

But it leads one to wonder: How are millennials buying homes? Obviously, some millennials are managing to become homeowners, despite the hurdles. 

With that in mind, is there something you should be copying to improve your own chances of becoming a homeowner? 

4 Strategies Millennials Are Using to Buy Homes

Here’s how smart millennials are buying homes today:

1. They’re using experienced real estate agents. As we mentioned in our 10 tips for buying your first home, using an agent to assist in home buying can be extremely beneficial. 

But, as it turns out, millennials are much more likely than most people to work with a real estate professional. While 87% of buyers overall work with an agent, younger millennials clocked in at 92% and older millennials posted 88%.

That’s good for millennials because there are major benefits of working with an agent, including:

• Better access to current homes on the market, thanks to the MLS and their own network connections.

• Better negotiating skills.

• Better understanding of the industry.

• Better ability to spot potential issues in the home and the inspection.

• Better access to title attorneys and lenders who may be beneficial in your unique situation.

Working without an agent means you’re at a severe disadvantage in today’s market!

2. Older millennials are moving up in their careers. The oldest millennials are in their early 40s now, and they have 15 years more work experience than the youngest millennials.

That means some of them have enjoyed 15 years of raises, bonuses, and promotions up the workforce ladder. 

In other words: The older millennials have had more opportunities to save money and are likely earning much more than their younger counterparts. 

In fact, the median income for individuals 35-44 years old is $85,694, while the median income for individuals between the ages of 25 and 34 is $71,566 (according to data from Bankrate).

That’s $14,000 per year is a lot more money to work with! 

3. They’re shifting their expectations. Instead of going after the big house with all of the cool, built-in amenities, millennials are more likely to purchase a home that requires repairs.

The intent, of course, is to invest some of the money saved into repairs that they’ll either hire someone to make or tackle on their own. 

The vast majority (75%) of millennials who choose their root are ultimately happy with the decision; only about 25% of them regretting it, according to research from Real Estate Witch.

If you’re considering buying a home that is in obvious need of repairs, talk to an expert beforehand. You should run a list of:

• What repairs/upgrades need to be made.

• Which repairs/upgrades you could manage yourself.

• How much it would cost for you to make those repairs/upgrades.

• How much it would cost to hire someone to make the other repairs/upgrades.

Knowing these figures beforehand can help you determine whether a fixer-upper is really a good fit for you and your family.

4. They’re leveraging the internet. Virtually all (99%) of millennials use the internet to learn about the current home buying market, according to the National Association of Realtors. 

And the internet can be a great resource. The internet can help you find real estate agents, local lenders, and information on the current housing market in your target area.

However, we do recommend leaning on your real estate agent, lenders, and other industry professionals for their expert guidance. While the internet is a great resource, the articles and information you find may lack the context and background information necessary to properly understand it. 

Millennials: Here’s Why You Should Enter the Market Cautiously

And while many millennials have managed to make that leap from renters to homeowners, it’s not all good news. An astounding 82% of millennials have regrets over buying their homes.

Their biggest regrets:

• Settling on an inconvenient location, meaning they wish they were closer to work, family, and local amenities.

• Choosing a neighborhood that turned out to be a bad fit. When looking for a home, be sure to pick a neighborhood that fits your lifestyle! If you love nightlife, it may not make sense to live somewhere rural.

• Winding up with a fixer-upper. Remember: 25% of millennials who picked a fixer-upper ended up regretting it. Always do the math beforehand to see if you can really afford a fixer-upper. 

• Suffering from decreased home value. This one may seem surprising, given that home values are rising everywhere—but it happens (and it was much more common before COVID). Still, things as uncontrollable as foreclosures down the street, rowdy neighbors, and community decline can all negatively impact home values. 

But that doesn’t have to happen to you, especially if you take the right strides. By finding the right partners to help you make found financial decisions, your home buying experience can be a positive one. 

Home-Buying Opportunities for Millennials: How to Work With New Local Realty 

At New Local Realty, we’re primed to work with millennials and first-time homebuyers. Through our unique buying opportunities and strategies for securing high-value, low-cost homes, we can help you find an affordable house that’s perfect for you and your family.

And thanks to our team’s decades of experience, we can ensure you see the best results possible. Contact us to learn more!