With more and more of the Millenial generation entering the housing market each day, the ""National Association of Realtors"":http://www.realtor.org/ (NAR) took a look at their browsing and purchasing habits to determine how their presence will affect the industry.[IMAGE]
According to NAR's report, Millenials (those born between 1980 and 2000) make up the second largest group of recent buyers at 28 percent; Generation X (those born between 1965 and 1979) took the largest share at 31 percent.
The median age of recent Millenial homebuyers was 28, their median income was $66,200, and their median down payment was 5 percent--which was most often financed through their personal savings as opposed to the proceeds obtained from the sale of a former residence.
""Homeownership is an investment in your future, and is how many younger American families begin to accumulate wealth,"" said Paul Bishop, VP of research for the association. ""The oldest of the Millenial generation are now entering the years in which people typically buy a first home, and despite the recent downturn, homeownership still matters to them.""
Bishop added that the sheer size of the Millenial generation--the second largest in history after the Baby Boomers--should give a ""powerful boost to long-run housing demand, though in the short-term mortgage accessibility and student debt repayment remain challenges.""
While the vast majority of recent buyers (an estimated 80 percent) considered their home purchase a ""good financial investment,"" young buyers were even more likely to think so (85 percent).
In terms of what they're looking for, younger buyers had a tendency to stay closer to their previous residence--often staying within 10 miles--and were more likely to buy a home in an urban or central city area than older buyers. They also placed higher importance on commuting costs than older generations, who focused more on energy efficiency and living in an environmentally friendly community.
The report also showed the Internet is an important tool for homebuyers and industry professionals alike: 90 percent of Millenials frequently used the Internet to search for homes, and they were also more likely to find they home they eventually purchased on the Web.
""An interesting finding is that Older Boomers and Silent Generation [born between 1925 and 1945] buyers found the mortgage application and approval process more difficult than expected compared to younger buyers,"" Bishop noted. ""This underscores the ongoing challenges that many credit worthy home buyers face with today's tight credit standards.""
On the seller side, the largest group was Generation X, comprising 30 percent of recent sales, followed by Younger and Older Boomers (a combined 42 percent), and the Silent Generation (19 percent). Typically, older sellers had been in their homes longer, while Millenial sellers had occupied their homes for a median of only five years (most often relocating due to job changes or needing a larger home).