Where are the 79 million members of Generation Y/Millennials (people age 19 to 36) living now and where do they see themselves in the future? These questions are important to every homeowner in the country because this cohort is the largest generation ever seen in U.S. history and comprises 25 percent of the population. Their decisions about all aspects of the economy, as well as home ownership, will have a profound Impact on the real estate market for many decades to come.
In a report published by the Urban Land Institute, 21 percent of respondents reported they currently live with parents or another relative. This is the same proportion as reported four years ago, which means that despite an Improving economy, as many Gen Y’ers moved back home as moved out of their parents’ homes over the past four years. Out of the numbers of young adults living on their own, 26 percent have actually made the step to homeownership. And even among those that haven’t, almost every member of this generation expects to own a home within the foreseeable future. Their reasons include seeing home ownership as a good long-term investment; wanting more space and privacy, and the stability provided by home­ownership. Many expect to use money they have saved for their down payment. What are the factors that will be most important to these future home buyers? In the survey, cost of housing ranked as one of the most important criteria when purchasing a home. Neighborhood safety is another marker, along with proximity to work. School quality is hugely important to those with children. Community character, encompassing such intangibles as ambiance, visual appeal and walkability, are top requirements as well. Other attributes important to Generation Y members include proximity to family and friends, as well as availability of shopping, dining, and entertainment.
While home ownership is important, Millennials also place a high value on work-life balance. Many Millennials feel they are underemployed. Roughly twenty-nine percent of Millennials with full-time jobs earned less than $35,000 a year, and more than half made less than $50,000, which affects the price they are able and willing to pay for housing. Many continue to compromise, such as renting for the moment, instead of buying. Millennials are paying a median rent of $925 and twenty-seven percent of renters have roommates to divvy up the costs. The significance of Millennials extends beyond their numbers. Not only are they the first generation to have had access to the Internet during their formative years, Millennials also stand out because they are the most educated generation In our history. About 61 percent of adult Millennials have attended college, whereas only 46 percent of the Baby Boomers did so. They are the generation that will shape our economy and our country for decades to come.