As the U.S. housing market nears full recovery and the Millennial generation matures, nearly half of U.S. home buyers are under 36 and reflect an increasingly racially diverse middle class, according to the first annual Zillow Group Report on Consumer Housing Trends.
The 200-page report also shows that 47% of people buying and 63% of those selling a home are doing so for the first time. The new buyers, sellers, and homeowners have old-fashioned aspirations, seeking a home that is both a good investment and a reflection of themselves. And they instinctively turn to internet research and social networks on and offline, approaching home ownership with both savviness and caution.
“We knew the Millennial generation was playing an increasingly large role in the housing market,” said Zillow Chief Economist Dr. Svenja Gudell. “But this consumer research allows us to get a fascinating, behind-the-scenes look at how their expectations and approach are playing out in the housing market. These young adults came of age during a recession, but they are buying their first homes in a high-priced and fast-paced market. They’re using every available resource, including online research and real estate professionals, and taking on the challenge with gusto.”
Added Zillow Chief Marketing Officer Jeremy Wacksman: “Young home buyers and sellers share their grandparents’ romantic notions about homeownership, and we’re finally seeing their home buying dreams come true in the data. These savvy consumers are doing things differently: they juggle shopping for homes to buy and rent at the same time, and they bring deep research and their vast social networks to the process.”
The Zillow Group Report on Consumer Housing Trends, which is free and available to the public, is a deep dive into the characteristics, aspirations and priorities of U.S. consumers when it comes to their homes.
The report challenges longstanding conventional wisdom across all generations and sheds light on major demographic and economic trends and how they will affect the future of real estate. The new report is the largest-ever survey of U.S. home buyers, sellers, owners and renters, and asked more than 13,000 U.S. residents aged 18 to 75 about their homes – how they search for them, pay for them, maintain and improve them, and what frustrations and aspirations color their decisions.
Following are some key findings from the study.
• While shopping for a home, 52% of buyers said they also considered renting, and only 46% of buyers got the first home on which they made an offer, demonstrating that in today’s fast-moving market, disappointment and competition are now part of the process.
• While 56% of buyers save up for a down payment a little at a time, 32% find savings are not enough and rely on other sources, such as gifts, loans, and cashing in their retirement savings.
• Millennials, who will define the future of real estate, include their social networks in their real estate transactions and expect their real estate agents to help with more than logistics – looking to them for strategic advice and remodeling ideas.
• First-time buyers rent longer than previous generations. When they do buy, they typically spend just as much as Baby Boomers on a home that is only slightly smaller than homes purchased by repeat buyers.
• It’s not just Millennials who are shopping online for real estate. Nine out of 10 buyers and sellers under 65 depend on both real estate agents and online sites and apps.
• Most Americans (83%) want a single-family home, and more than half (52% live in the suburbs. Of home-owning Millennials, 47% live in the suburbs.
• Renters are disproportionately women and people-of-color, and most make less than $50,000 a year. Their top concerns are budget, safety, and finding a home that allows pets.