Dissecting Myths About Millennial Homebuyers

What Millennials really want in a home is affordability and smaller, shared spaces

by Ali Wolf

I became obsessed with studying Millennials a few years back after attending session after session of hearing Boomers tell me, a Millennial, what my generation wants. At a certain point, I realized very few of Millennial “wants” resonated with me, and I set out to do something about it. I have traveled the country talking to builders, developers, and other Millennials, providing education, showing proven floor plans that have worked in markets around the US, and debunking these myths.

Myth: It’s easy to bucket Millennials by age, group, or geography

I grew up in Cleveland, Ohio and had friends who were the children of farmers. They didn’t know how to even tap financial aid, let alone think about the benefits of homeownership. Living in Southern California, I have friends who are children of celebrities; they enjoy the bank accounts of mom and dad and have completely different expectations of what their first home should look like. Within Cleveland, or Irvine, or Houston, or Tampa, you will always find your fair share of traditional Millennials and trailblazing ones. Stapleton, a master planned community in Denver, did an amazing job with their product segmentation. Traditional Millennials can have their white picket fence home, while trailblazers can have their pick of ultra-modern floor plans with hipster characteristics.

Myth: All Millennials want a single-family detached home

Admittedly, I always believed if a Millennial could afford a single-family detached home, they would choose it. That was until I was in Phoenix earlier this year, picking the brain of a late-20-something. She told me how her first home was an attached property, and I was quick to assume that was a compromise on her end just to make the payment, which was wrong. The woman explained that when purchasing her first home at 25, she was a single, working transplant that wanted to spend time exploring her new city and wasn’t willing to give any of her time to maintain the yard or roof.

Myth: Millennials are skipping the starter home and going straight to the first move-up

Don’t get me wrong, you will absolutely find your fair share of Millennials that are waiting longer to buy their first home and end up with what would traditionally be a move-up property, but that’s not across the board.

In fact, 60 percent of the Millennials Meyers Research surveyed in their annual assessment lived in a home under
2,000 square feet, with 30 percent of all respondents living in a home between 1,000 and 1,500 square feet. This data includes markets all over the country, not just in California, suggesting Millennials even in relatively affordable markets are living in smaller homes. As our industry works through reasonable density solutions to help combat affordability, keep this compromise in mind.

Myth: All Millennials want experiences

It’s no surprise that affordability is at the front of Millennial minds. After all, many graduated during the Great Recession with mounds of student debt, and an economy riddled with sluggish income growth. For master planned communities, experiences and quality of life still matter; that’s part of the appeal! For other communities though, keeping it simple is just fine. In some cases, Millennials will happily forego wine night, or community programming, if it means their HOA is lower.

Our team of consultants does work across the country to best advise builders and developers how to appropriately build for Millennials. Please contact us at awolf@meyersllc.com if we can help you with your next project.

Ali Wolf is the Director of Economic Research at Meyers Research. She may be reached at awolf@meyersresearchllc.com

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