It’s a commonly touted statistic that millennials aren’t buying houses. While there’s a certain level of truth to that sentiment, it doesn’t tell the whole story.
Compared to their parents and grandparents at their age, fewer millennials are homeowners, but millions of younger people have invested in their own property – and they might not be the starter houses you’d expect.
Despite living with their parents longer than any generation before them, putting off marriage for an increased time span, and sometimes struggling to find their dream jobs, millennials are going from perennial renters to owners of what might be their forever homes.
So how is the idea of a starter home changing, and what are first-time homebuyers looking for in a house? With a survey of over 1,000 people about their first homes, which features and amenities mattered most, and how market prices impacted homeownership. Keep reading to see what we learned.
Starting Off with a Bang
Pulling the trigger on your first home can be a nerve-wracking experience. Considering it’s the biggest purchase most people will make in their lifetimes, it’s OK to be a little worried about the home-buying process. Most experts say it’s important not to let emotion rule your decision on the quest for the perfect place.
Still, that doesn’t mean you shouldn’t go in without a few expectations. When asked about their ideal starter homes, millennials had higher expectations than older (and potentially more seasoned) homeowners.
Putting Down Roots
There’s an adage that nothing matters more when you’re buying a home than “location, location, location.” Even if you’re looking to buy on a budget, most experts advise buying the worst house in the best neighborhood over the best house in the worst neighborhood.
For both men and women, the affordability of an area was more important than the crime rates in that city or neighborhood. Amenities and features can play a major role in a home’s asking price, but the one factor you can’t change is the value of the suburb.
Proximity to the workplace was not as pressing a concern for most people. Less than half of both men and women said this factor was a top priority in deciding where to live. The least touted top factors when it came to proximity were purchasing a starter home close to places of worship (7.7 percent) or near an active nightlife (6.5 percent).
Laying Down the Cash
Mortgage lenders and financial experts agree that if you’re looking to buy a home, you should set your maximum mortgage payment at 28 percent of your total household income. While you can always go under budget, it’s important to remember that regular home upkeep has to be factored into your monthly expenses.
Ranking Household Amenities
Thinking Outside the Box
Our first home and dream home probably isn’t the same. While you might think about how much house you can afford as a first-time homebuyer, or how far away the neighborhood is from where you work, your dream home lets you fantasize about all the things you want without any of the pesky logistics.
Gen Xers and millennials dreamt about the biggest homes with the most bedrooms and bathrooms. With roughly 3,300 square feet, younger Americans wanted bigger homes than baby boomers polled. And while ranch-style homes were the most popular style for Gen Xers, millennials preferred the clean lines and minimalist layout of a modern abode instead.
No matter how excited you are to move, there’s a very real possibility that eventually you’ll outgrow or need to relocate from your starter home. The average person moves more than 11 times over their lifetime, and that means that as much as you love your current home, the odds are you won’t stay there forever.
As first-time homebuyers, you might expect them to stick around longer. Compared to baby boomers who stayed in their starter home for 13 years, Gen Xers only lived in their first house for 11 years, and millennials pulled up stakes after a 10.
Making Your House a Home
The housing market is changing, and what people are looking for in a starter home is changing right along with it. While previous generations might have looked for smaller, less expensive properties to start their journey as homeowners, millennials looking to transition from renters to buyers have a slightly different plan in mind.
Even if they aren’t planning on living in starter homes for very long, they still want bigger, more grandiose homes to call their own.
collected responses from 1,014 people using Amazon’s Mechanical Turk. 53.4 percent of participants were female, and 46.6 percent were male. Participants ranged in age from 18 to 82 with a mean of 36.5 and a standard deviation of 11. Participants included those who had purchased a home and those who were planning to purchase a home in the future.
Participants were excluded if they never planned on purchasing a home or were clearly not paying attention (e.g., failed attention-check question or entered obviously inconsistent data). weighted the data to 2017 BLS data for age and gender of Americans. Statistical testing was not performed.
Data rely on respondent self-reporting. Self-reported data may present a variety of issues. These issues include, but are not limited to, exaggeration, selective memory, telescoping, and attribution. Not all states could be analyzed for this study. Only states with sample sizes of 26 respondents or more were used.