With sites like Zillow and RedFin making house-hunting easier, we wanted to know what tools Millennial homeowners use to buy their abodes…
In 2016, homeownership rates bottomed out in the U.S. with 62.9% of the population owning their homes, a rate not seen since 1965. Much of the blame for the lackluster market has been placed on Millennials, who are often rumored to be uninterested in buying their dwellings. But in the two years since that dip, the rate of homeownership in the country has risen sharply to 64.2%—and that growth is being driven by (surprise!) Millennials. While census data found that homeownership rates are highest for the 65-and-older demographic (79%) and lowest for those under 35 (36%), Millennials are the fastest-growing group of buyers. In just one year, the portion of Millennial homeowners rose to 36% from 34.7%. As the Wall Street Journal observes, that “was by far the largest increase of any age group.” In fact, Millennials currently account for the largest share of first-time home buyers at 66%, according to NAR, and Ypulse data found that three-quarters of the generation plans to own someday.
So now that we know Millennials are indeed buying homes, the question is how they’re buying them. Where past generations were limited to ads printed in the paper and their trusty real estate agents, the rise of sites and apps like Zillow and RedFin promise Millennials a self-guided and tech-centric home-buying experience. Ninety-five percent of buyers already use the internet to look for homes, according to NAR, and 51% buy homes that they have found using the internet. Some are even claiming that tech-savvy Millennials will soon demand AI and VR experiences when house hunting, an idea Forbes put to print in its article titled “80% Of Millennials Want To Buy A Home And Virtual Reality Is Upending The Process.” However, other research has found that Millennials are mostly using tech as the first step, eventually turning to an agent. NAR found that 90% of Millennial homebuyers still ended up purchasing their home through an agent, and Real Estate Express Found that 89% of Millennials want to use a real estate agent.
So what’s the reality? To get a clearer sense of what the Millennial home-buying experience looks like, in our recent quarterly report we asked 18-35-year-old homeowners to tell us what tools they used to purchase their home. Here’s what they had to say:
While it’s true that over half of 18-35-year-old homebuyers are using online real estate sites, and about half are cruising for homes on their phones, it turns out that NAR is right—the majority of Millennials still turn to agents to get the job done, just like past generations. Many of the analog house-hunting ways of old have yet to go completely out the window. Nearly half of Millennials went to open houses, a quarter still cracked open the newspaper, and 37% drove around neighborhoods looking for “for sale” signs.
However, that doesn’t mean the housing market isn’t turning into a digital-first one. According to NAR, the typical buyer in 2016 used a mobile device to search for properties online before looking at websites with photos and information about the home buying process. Only then did they contact an agent, a process that is largely done online. Once Millennials have an agent, however, their preferred methods of communication with that agent are not necessarily tech-heavy—though there are some differences between men and women on this point:
Millennial males much prefer chatting with their agents in person, and don’t mind more tech-centric methods. Millennial women, on the other hand, prefer email as the primary form of communication in the house-buying process, and have very little interest in communicating through websites. That means real estate agents that are willing to adapt to Millennials’ preferred methods will capture the demographic.
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