Millennials—The Home Buyers of Tomorrow

The 2014 California Association of REALTORS®Millennials Survey looked at those born between1980 and 1996, or 18 to 34 year olds, who currentlylive in California. The Survey focused on renters andhome owners and found that one in five arehomeowners, 41 percent are renters and 36 percentlive with their parents. When looking specifically at18-26 year olds, the Survey revealed that nearly half(49 percent) live with their parents.

Demographically, they are very diverse—62 percentare minorities. This generation is known for delayingmarriage and having children; the majority are notmarried and nearly half do not have children. Theyare, however, well educated; 46 percent of 27 to 34year olds have a college degree and 42 percent of18 to 26 year olds are currently enrolled in a college.Despite many having a higher education, theirearnings and employment have some catching up todo. Only about half of echo boomers are currentlyemployed, and only one-third have a full time job; 19percent have a part time job, 24 percent are studentsand 20 percent are unemployed. This bleakemployment situation translates to a median annualincome of $35,000. There is a silver lining forearnings; older millennials (those between 27 and 34years old) have a median annual household incomeof $50,000, compared to $30,000 for their youngercohort (18 to 26 year olds).

Renters

Approximately two out of five millennials are renters,paying a median monthly rent of $1,075. Affordablerent is the most important reason for electing to livein their current residence and also why the majorityrent instead of buying—67 percent said they rentbecause they cannot afford to buy.

While they may not be able to afford to buy a homenow, most Gen Y renters feel that homeownership isimportant because it gives them the freedom to dowhat they want with the property, and they expect tobuy a property within the next five years.

Echo boomers in California prefer single familyhomes, as two out of three indicated they plan topurchase a single family home, compared to only 12percent who plan to purchase a townhome orcondominium. Contrary to popular belief, the idealhome for many would be on a big lot with lots of land(42 percent) in the suburbs (41 percent). Fewer thanone in three indicated an urban location preferencefor their ideal home.

While they aspire towards home ownership, themajority are uncertain or doubtful they could obtain amortgage now. Millennials are realistic about theresponsibility that comes with the territory. Affordablehome price, problems with credit/mortgages/taxesand maintenance are some of their biggest concernsabout home ownership. About half of Gen Y rentershave student debt, which is below $20,000 for many,so they do not feel it is preventing them fromqualifying for a mortgage. However, the majorityhave other debt, such as credit cards and auto loans,which would make it difficult for them to buy a home.

Brought to you by:

Robert LeidigREALTOR®Century 21 Town & Country3700 Inland Empire Blvd. #150Ontario, CA 91764

Office: 909-204-5800Cellular: 909-957-7661Email: rle3491929@aol.comBRE License: 01422758