Millennial New Home Buying: Are You Ready?
You’re one lucky Millennial. Unlike many of your peers, you were in the position to buy a home several years ago when prices were low. Millennials make up the largest segment of first-time home buyers by far, but you’re looking for something else. You’re looking to move up.
Here are a few reasons why more Millennials are deciding it’s time to find their second home and why new homes in the suburbs are so appealing.
Cashing In on Appreciation
Around the country, home prices have been appreciating. If you’re an older Millennial who was able to buy a home in 2009 just after the recession when prices dropped dramatically you’ve probably seen a huge increase in equity. But even if you bought just five years ago there’s a good chance your home has appreciated, especially if you live in one of these 10 states.
Overall, homes have appreciated nearly 6% a year in the last five years. In a number of cities and states, appreciation is more than double that. And if you bought a fixer for a good price that you’ve repaired, there’s also additional sweat equity.
Millennials who bought 5-9 years ago have a good chance of clearing enough cash for a down payment on their next move up home if they decide to sell. It’s one factor that’s encouraging Millennials to move up into new homes even if they’re more expensive.
Markets (and Prices) Are Stabilizing
Real estate has been on the upswing for quite some time, and now many experts are predicting a slow down with less appreciation than years past is around the corner. This is partly due to rising interest rates. However, right now the interest rates are still fairly low, and the Federal Reserve recently decided not to do another increase.
Growing Families and Changing Needs
Time has a funny way of changing home needs. When many Millennials bought their first home years ago they were young professionals that maybe just got married. They were interested in urban life near the action of the city.
Millennials may have started later than their parents and grandparents, but now they’re starting to have children and eyeing life in the suburbs. The growing trend of Millennials moving to the suburbs makes complete sense because they’re priorities have changed.
As of 2017, 52% of Millennial home buyers had at least one child. Now the quality of schools matter, and suburbs are known for their schools. Suburbs also offer better value and bigger homes for a growing family.
Millennials, in particular, say their child’s opinion matters during the homebuying process. What do kids want most? They want their own room, a big backyard, a home near the park, to be near friends and close proximity to a swimming pool. These are all things that are much easier to find in the suburbs than the inner city.
New Homes Mean Less Work and More Amenities
Millennials are just like first-time home buyers of past generations. Your first home tends to be a resale that offers great value but is in need of a little TLC. Since it was your first foray into homeownership you may also have missed the mark a bit on exactly what you needed in a home or neighborhood.
A recent survey of Millennial homeowners conducted by Bank of the West found that half of the respondents had issues with their first home. For some it was unexpected damage and maintenance, and for others it was the size or layout that just didn’t fit their family’s needs.
That’s why new homes are so appealing. Millennial homeowners like the idea of buying a new build, especially when they are able to make customizations to a home plan. After their first home, Millennials are much more aware of what they need, and customization makes it possible to get everything on the must have list. There’s also a lot less concern about maintenance, which is great for young families with busy schedules.
Another bonus is the neighborhood amenities. Because Millennials are the main segment of home buyers today, developers are beginning to cater to exactly what they want. They’re building communities that are walkable, have shopping for everyday necessities and entertainment for people of all ages.
If it’s time to move up into a new home myHouseby can help. We give you an easy way to find neighborhoods and home plans that fit your lifestyle. Every home plan can be customized right on our site and the price will update automatically. Add features, change up the layout and put your personal touch on your next home.
Once you have perfected your home plan, myHouseby can set up a meeting with the builder and provide complimentary concierge services. It’s the simplest way to discover and design a new home that’s made just for you.