As more Millennials enter homeownership, the group’s housing and financial priorities are shaping the future of real estate, according to a recent report.
In a survey of more than 1,000 people on homeownership preferences, Porch.com found that, among many differences, Millennials are using more technology to find their homes. But while the report noted many trends among Millenials, it aimed more so to reveal different values among the population groups.
“We wanted to understand how Millennials, Gen Xers, and Baby Boomers engage differently in the homebuying experience, from finding their dream property to financing their purchase,” Porch wrote. “Our findings reveal some massive differences among age groups, but also some enduring principles that continue to guide home shopping.”
Tech is changing traditional real estate
Chief among the generational differences is the use of technology. Not only are almost all Millennials using the Internet to find prospective homes, but many are turning to social media as well, according to Porch’s report. About 57 percent of Millennials use social media during their property hunt, while only about 21 percent of both Gen Xers and Baby Boomers would turn to sources like Facebook.
Baby Boomers prefer a personal touch, according to the survey. Boomers were the most likely among the three groups to seek out available homes in-person and about 39 percent physically explore their desired neighborhoods for homes.
Millennials, Gen Xers save for a bigger down payment
It seems that Millennials’ initial reluctance to enter homeownership was to save for bigger down payments, according to the survey. On average, Millennials and Gen Xers make a 10 percent larger down payment than Baby Boomers, dishing out about $17,570 up front, compared to $15,850 for Boomers.
“When it came to down payments, Baby Boomers handed over fewer dollars up front than either Gen Xers or Millennials. But in interpreting these results, you’ll always want to keep inflation in mind,” Porch wrote. “However, younger Americans may still have more difficulty buying into the housing market than their elders because home prices continue to rise faster than wages in many metropolitan areas.”
Similarities exist, too
While there are stark differences among Baby Boomer and Millennial homeownership priorities, they do have a few similar preferences. Millennials and Baby Boomers are roughly equally likely (about 35 percent) to use a real estate agency, while Gen Xers were slightly less likely (30.5 percent) according to the survey.
For Boomers, the general reluctance to use a real estate agent was not the expense, but rather that they believe they could personally do a better job. For Millennials, however, real estate agents appear to be too expensive, according to the survey.
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