Millennials and the Housing Market: Three Key Points

LAS VEGAS – Just when you thought you had a grip on millennials, there's something new to learn about this cohort and their impact on the housing market. At the Premier Agent® Forum, an annual event that brings together thousands of Premier Agents, Stan Humphries, Zillow Group chief analytics officer & chief economist, revealed three keys to understanding millennials' home buying needs.

1. Stop saying millennials don’t want to buy homes

Nearly 13 percent of surveyed millennials said they would like to buy a home in 2015; 67 percent believe that owning a home is necessary to live the good life and the American dream. Millennials most certainly believe that buying a home is the best long-term investment they can make, but just because most aren't able to purchase right now, don't dismiss the opportunity to start a discussion today.

2. Understand the major headwinds they face

Millennials might be the next powerhouse generation, but they face a number of challenges as leading edge members head into their mid-thirties, a typical time for major life changes. Today's millennials are delaying marriage and children, and while households might be smaller because of it, this group is still interested in homeownership. Currently, 32 percent of all adults are living in doubled-up households to cope with increasingly expensive housing costs. It's difficult for millennials to save for a down payment due to record high rents even though this group is renting for longer periods — six years compared to 2.6 years between 1970 and 1974 — before purchasing a home.

3. Help this generation find the opportunities

Despite the fact that their annual income has virtually remained the same over the last 40 years, 70 percent of available homes nationwide are affordable for typical millennials. As the doubled-up households begin to unwind, there will be an enormous opportunity for real estate agents to help them find homes. Today, condominiums make up more than 40 percent of first-time home purchases compared to 28 percent in 2001. There is also a new construction trend of building bigger homes on smaller lots, which might appeal to millennials with reduced households — two people living in the home compared to three since the early 1970s — or those home buyers who simply don't want to maintain a large yard.