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Gen-Y: Up to Bat as Next Wave of Homebuyers
By John Voket, RISMedia Consumer Confidant
Thanks to a recent report from the Virginia Association of Realtors (varbuzz.com), I learned a lot about the next generation of homeowners and homebuyers. The VAR pointed to data from the Urban Land Institute (ULI), which noted that in 2010, Generation Y surpassed the baby boomers to become America’s largest generation.
According to the report, Gen-Y-ers currently are 15 to 32 years old, are moving into apartments and buying homes, and will dominate residential demand for much of their lives –just as the boomers did over the past 45 years.
To get a sense of this young generation’s housing circumstances and future preferences, the ULI commissioned an online survey of a nationally representative sample of Gen-Y individuals ages 18 to 22 who are no longer in high school.
The report is quite detailed, but the VAR focused on a few of the most relevant findings to its members, and future home sellers:
• For the first time in decades, America’s average household size is inching up as Gen-Y-ers (and even some Gen-X-ers) take longer to leave home or return to their parents after losing a job.
• Two-thirds expect to be owners, including over half those in their 20s. Among those who will be in their 30s, three-fourths believe they will be homeowners.
• Of those saying they do not expect to own by 2015, seven of ten claim they will own at some future time. • Over half those currently living with their parents believe they will have acquired their own homes by 2015.
• Hispanics are ahead of whites in their ownership expectations. Blacks have slightly more modest home buying goals, but the difference is not statistically significant.
• 21 percent expect to put down less than 10 percent as down payment; 39 percent expect it to be between 10 percent and 20 percent. And 40 percent expect to come up with a down payment of more than 20 percent.
The VAR also noted that since such a high percentage of future homeowners expect to put down less than 20 percent on a home purchase suggests—Gen Y may not be fully apprised of today’s tighter mortgage underwriting standards.
Good food for thought if you are among the newest generation of real estate clients, or planning to sell in the near future.