In its seventh year of collection and research, Zonda’s annual Millennial Survey and the housing experts behind it are hoping to learn about the largest living generation and what they’re willing to do to buy a home.
While Zonda has followed millennials far longer than seven years, this group—born between 1980 and 2000—is in its top home buying years. According to Zonda, 70% of first-time home buyers are age 24 to 32. This means that the youngest of millennials are now on the hunt for the perfect home.
As a group that has never known a “normal” housing market, Zonda chief economist Ali Wolf wants to know what millennials are willing to do to secure a home in today’s market. Whether that is smaller square footage, a move to less expensive areas, or stretching the budget.
We caught up with Wolf to learn more about the survey and why millennials are so unique to the housing market.
Why are millennials an important group for the housing market?
Even before the pandemic, we knew that 2020 and beyond were going to be good years for the housing market just based on population distribution. Millennials are the largest living generation, and right now the peak share of this cohort is at their prime home buying years. Knowing what this group wants is critical for the home building industry since the opportunity to capture these prospective home buyers is vast.
Are millennials the top buyers today?
Well, they were. From 2014 up until 2022, millennials were the top buyer in the housing market. As interest rates and home prices rose, however, many in this cohort struggled to keep up. Baby boomers are now the largest home buying cohort followed by millennials. I think millennials will overtake boomers again, but something will have to give on supply and/or affordability to let that happen.
Millennials aren’t just first-time buyers then either, are they?
Definitely not. The most recent data shows the homeownership rate for those under 35 years old is nearly 40% and 63% for those 35 to 44 years old. When we talk about millennials, we are no longer just talking about first-time buyers. And that begs an important question—what do move-up millennials want, and how does that compare to first-time buyers? We can help answer that with our survey.
What makes millennials’ home buying experience different from previous generations?
There are many things, but I just want to focus on supply and demand dynamics here. Historically, the housing market has been reasonably steady. What I mean is that home prices, supply, wages, and demand have generally increased at a modest and similar pace. Millennials have lived through two extreme examples (the mid-2000s housing boom and the COVID housing boom) where that hasn’t been the case.
These unique periods resulted in new challenges for home buyers, and while they don’t exclusively apply to millennials, they’ve made the home buying process more difficult. The first is the popularization of housing as an investment too. Investors either buying to hold or buying to flip have helped contribute to the dearth of supply. The second, the lock-in effect of existing homeowners reluctant to sell their homes given the mortgage rate differential, has a similar effect. Millennials are trying to secure their first home while facing fierce competition and limited and expensive inventory.
If you were born between 1980 and 2000, or have children or grandchildren who were born within that range, Zonda wants to hear from any and every kind of millennial about their home buying experiences, goals, and expectations.
Take the survey today.
