July 22, 2019
The Millennial Market–Shaping the Future of New Construction
At Ernest Homes, we’re always keeping an eye on new trends in new construction. Our quest to provide the best new homes in the Savannah, GA area means we always keep our eye on the movers and shakers driving new home sales. And right now…they’re the Millennial generation.
Millennial buyers, those born from 1981 to 1997, are currently the largest segment of the population buying homes. With the largest birth year group of Millennials turning 29 this year, this powerful generation is poised to begin the “settle-down” years of their lives. With plans for marriage and children foremost in many of their minds, looking for a home is one of their main goals in the near future. 45% of mortgages this year will be financed for Millennials, versus 37% for Gen X-ers and 17% for the Baby Boomers. Millennials are likely to remain the focal point of real estate transactions for the next decade, as their housing needs change over time.
The word on the street is that Millennials are less interested in purchasing homes than previous generations, but recent studies indicate this is simply “fake news”. According to a recent survey by Fannie Mae done in 2014, most millennials consider owning a home more sensible in the long run than renting for financial and lifestyle reasons — including increased control of their living space, flexibility in future decisions and increased privacy and security. It seems that it’s the financial mechanics of buying a home, such as collecting a down payment, obtaining a mortgage and working within a sensible budget, are the major obstacles they’re facing.
So how does Ernest Homes make home ownership more feasible for Millennials?
Millennials are known for their need to conduct intense research before making buying decisions. A Millennial may consider forty pairs of black dress shoes before making a purchase, and choosing a home is no different. As the generation who came of age with the Internet as their prime tool for gathering information, Millennial home buyers are encouraged to buy a home based on the photos and listings they find online. It’s important for homebuilders to create a positive Internet presence such as ours, as well as engage in social media.
Unlike the more “DIY” Gen-X group, Millennials also actively reach out for advice, guidance and assistance when it comes to selecting their new home. They want experts in the field to be there at all points of the process to answer questions and provide information regarding their products. They’re more likely to meet with homebuilders several times before making their final decisions. Our team is dedicated to providing exceptional customer care at each stage of the home buying process, from the first contact to the time they look to us for another home to meet their needs.
Due to flat salaries and increased amounts of student loan debt, coming up with a down payment is quite a challenge. This leaves little cash in the account after closing, limiting the amount of changes Millennials want. This encourages them to buy homes that have the features they want right out of the gate. Some of these features include modern kitchens and bathrooms, smart home features, an open floor plan, a home office, a convenient family-friendly location and good Internet and cell service. Almost half of Millennials would rather buy a brand new house to avoid serious maintenance issues. At Ernest Homes, our exceptional, customizable floor plans and quality construction ensure that we’ll be able to meet these challenges with ease.
The financial dilemma of the down payment can also result in “generational homebuying” – where the parents of Millennial buyers are also involved in the final decisions. The Millennials will do the initial research and find the options that they’re willing to consider, but in some cases their parents will be contributing to the down payment, or even covering the entire amount. This brings another set of opinions and requirements into the equation. The homebuilder’s ability to interact successfully with both sets of buyers is often key to forging a strong relationship.
Studies show that only 11% of Millennials consider their first home to be the only one they’ll ever buy, so savvy home builders will know that these buyers will plan to sell their starter home and move into another residence at some point. 68% view their first home as a stepping stone to the home they really want and making improvements is not part of that plan. The average previous homeowner kept their “starter” home for ten years, while the oldest Millennials, on average, have only been keeping their first home for six years. By creating solid relationships with our customers, the team at Ernest Homes remains the perfect homebuilder of choice for our Millennial customers. As part of our family, we look forward to providing the ideal housing solution to our clients’ every need, both now and decades from now!
