Real Estate News

3 effects associated with new home buyers

Published: 30 Jun 2017

Every shift in housing demographics and age will likely come with a flurry of consequences for the market. To accurately see what this will mean for the newest generation of home buyers, especially the millennial-aged potential residents, it may be necessary to look at the trends that are still in formation and could possibly impact the housing market as a whole. The following trends may not be new but are reportedly very much in progress.

1. Shifting from coastal states
Despite the stereotypes, the millennials who are buying homes may be doing so away from the highly popular coastal states typically associated with young arrivals to the housing market. According to Abodo, which collated data from a 2015 survey from the U.S. Census Bureau, Ogden–Clearfield, Utah, had the highest percentage of millennial homeowners at 51 percent. Other top rankers were in states like Minnesota, Iowa, and Texas.

Conversely, the regions where millennials owned the fewest homes were located in states like New York and Hawaii. Half of the bottom five locations, including the place with the lowest amount of millennial ownership (17.8 percent) were in California.

The source attributed some of this to the greater likelihood of renting in high density, popular urban areas, instead of buying, and could be one of the signals that the theorized shift from the overcrowded cities to inland states might actually start to happen.

2. Remote transactions
A Redfin survey from this May compiled responses from 3,350 people about housing transactions conducted last year. These results seem to show an increase in the number of buyers who offered to purchase a home without physically seeing the building itself. The exact number reportedly increased by 19 percent within just a year, representing a major uptick.

Of the three generational types measured (baby boomers, generation X and millennials) the last of these had the highest amount of those who said they had made a "sight unseen" offer on a home, with 41 percent answering this way. 

Nela Richardson, chief economist for Redfin, said that millennials were "three times more likely than Baby Boomers to make an offer sight-unseen, and they're more likely than older buyers and sellers to negotiate commission savings" in a related press release on the findings.

3. Increased impact
Although there's been much written about millennials and housing, the true impacts may be yet to truly manifest themselves. The Joint Center for Housing Studies' of Harvard University's 2017 report, "The State of the Nation's Housing," said that household growth is "rebounding" in part do to the older millennial population.