Boomers, Millennials share common housing goals

By Brandon Wells

Housing markets are constantly shaped, and re-shaped, by consumer demand — the needs and wants and financial wherewithal of the people looking for their next home. Traditionally, as new generations reach homebuying status and start to enter the housing market, the nature of their demand changes. They might aspire for different sizes, different designs, different amenities, or even different locations (i.e., more urban, more suburban, more rural) than the generations that came before. Which is why one of the current market trends is especially curious, and potentially defining for the housing industry in the near future. Simply put, the housing goals of two influential generations of American consumers — Baby Boomers and Millennials — appear to be converging as they each set about to look for their next homes. It’s not news that Boomers, those born between 1945 and 1964, have been in a downsizing cycle for a number of years as they continue to reach retirement and “empty nest” age. They want smaller homes and smaller yards that are easier to manage, and a range of amenities and conveniences that support their lifestyles. At the same time Millennials, that even larger generation that was born between 1981 and 1997, is beginning to emerge as a force in residential real estate. But for some reasons we’ll explore below, many of these up-and-coming homebuyers are shopping for the same types of homes — smaller footprints that are easier to maintain — as their elders. Let’s take a closer look: First, housing expectations for many Millennials have been shaped by a broader economic force, namely The Great Recession of 2008-2009. As the early wave of this generation, which is now between the ages of 21 and 38, was finishing school, it was facing an economy where jobs were hard to come by and careers were slow to gain traction. A second, and related, reason is the steep student loan burdens incurred by many young adults. While they have been trying to build careers out of the recession, their lingering debt has slowed down the capacity for many to marry, form households, and afford down payments on a home. Taken together, these two reasons explain why smaller, more affordable housing is high on the priority list of this new generation of homebuyers. A third reason for the Boomer-Millennial collision course is lifestyle. It seems large numbers in both generations believe smaller is smarter, even to the extent that an entire market for “Tiny Homes” has caught on. And retailers such as IKEA will show you how to outfit a floor plan as small as 250 square feet. What’s it all mean to the housing industry? These two generations of Americans represent a strong majority of the homebuying public. Millennials alone account for 42 percent of today’s buyers. Both of these demographic groups are showing an inclination for smaller homes and amenity-based living, such as pools, athletic clubs and pet-friendly features. Both generations also want the convenience of smart home technology, which includes homeowner-controlled […]

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