Zillow was out Wednesday with an analysis of its 2016 Report on Consumer Housing Trends that reports almost half of millennial homeowners live in the suburbs, and the majority stay in the same city when they buy a home, revealing their home-buying preferences now that they are the largest generational group in the housing market.
Millennials made up 42% of home buyers last year, more than any other generation, with most of them buying for the first time.
Millennials, those ages 18-34, associate home ownership with the American Dream and believe that buying a home is a good financial investment, even more so than Generation X and baby boomers, Zillow said. But until recently, they were delaying home ownership, and it was difficult to know where they would actually purchase homes when they started buying. The median age of a first-time home buyer is 33 years old, compared to 29 a generation ago.
Among other findings:
- Almost 50% of millennial homeowners live in the suburbs, while 33% live in an urban neighborhood and just 20% live in a rural area.
- Of the millennial buyers who moved in the past year, 64% stayed in the same city and just 7% moved to a different state.
- When millennials become homeowners, they skip the traditional starter home by choosing larger properties with higher prices: They pay a median price of $217,000 for a home that is about 1,800 square feet, similar in size to what older generations buy.
- Millennial home buyers share many preferences with their grandparents' generation, both choosing homes with shared community amenities and considering townhouses at higher rates than other generations.
"Millennials have delayed home buying more than earlier generations, but don't underestimate their impact on the housing market now that they're buying," said Jeremy Wacksman, Zillow Group chief marketing officer. "As members of this huge generation start moving into the next stage of life, expect the home-ownership rate to tick up and suburbs to change to suit their urban tastes. We're constantly learning about this young group of home buyers -- we're finding that they are more similar to older generations than many thought. Their views on community and home ownership are pretty traditional, and they don't all fit the urban stereotype you might have in your head."