Millennials have become known for so many (mostly negative) character traits that the popular imagination now holds that they’re a generation of late bloomers, more interested in avocado toast and social justice than they are in holding down a job or moving out of their parents’ homes. Of course, as with any stereotypes, it’s usually easy to find an example here and there that seems to confirm the narrative, but on the whole, they’re nonsense.
Case in point: Millennials aren’t buying homes and will be forced to rent for the rest of their lives.
That’s been a media talking point for almost as long as the millennial generation has been old enough to begin putting their signatures on mortgage applications. Experts and pundits were quick to observe low homeownership rates among millennials and ascribe them to some kind of generational failing; a choice, rather than a product of some external force. Unfortunately, the latest data is putting the lie to that assertion – and there’s growing evidence that millennials are going to change global real estate trends in a big way in the very near future.
The Elephant in the Room
For previous generations, buying a home was a key part of the American dream. It was the second major act of adulthood, usually right after getting married. For Baby Boomers and Gen X’ers, that was the undisputed path to building a life. The drive towards homeownership at all costs had a price, though. It resulted in a housing market collapse that created the largest global economic downturn since the great depression.
It was into that environment that millennials first started to come of age, and they’ve suffered from a difficult job market and higher levels of student debt than any generation before them. Given that reality, it’s easy to explain low homeownership rates by millennials as nothing more than a product of the broader economic conditions. In reality, delaying buying a home reveals a generation that may be more financially astute than their parents, which is a sentiment reflected in a report by Bank of America.
Building Momentum
As housing markets have improved – surprise, surprise – so has the rate of homeownership among millennials. They haven’t just improved, though. They’ve shown the biggest improvement of any age group, which reflects both the sunnier overall economic picture and a pent-up demand that’s only beginning to show up in the data. Already, surveys have revealed that four in ten millennials already own homes, and that number will only increase as conditions continue to improve. That paints a picture that’s a long way away from the popular myth of the ‘directionless millennial’.
Changing Markets
There’s another, more important long-term effect that millennials are having on global real estate markets, and it’s that they’re driving a rapid adoption of new technologies in the space. Already, it’s common for tech-savvy millennials to find real estate agents online, or even to eschew agents altogether. They’re also pushing the industry to adopt new approaches to home sales, like the inclusion of virtual or augmented reality showcases that let prospective buyers go on a 3D walkthrough of listed properties. On top of that, millennials are behind the rise of fintech startups that could reduce the time it takes to get a mortgage to just 30 minutes, which will accelerate home sales even further. Not coincidentally, the founders of the companies spearheading these developments tend to be members of the millennial generation, themselves.
Only the Beginning
A look at the reality of today’s real estate market reveals that more millennials than ever are joining the ranks of the world’s homeowner class, and there’s every indication that they will continue to do so. They’re also leading the charge to make buying a home easier, more flexible, and faster than ever before, which should help other members of the generation to buy homes in the coming years.
If all of these factors aren’t enough to dispell the myths surrounding millennial homeownership, consider this: the generation as a whole is only beginning to enter their prime economic age. That means that all of the positive data listed here only represents the tip of the iceberg, and there’s nowhere to go but up. So if you’re a member of the much-maligned millennial generation, make sure you let your elders know how misinformed they are – and you can serve them their correction with a side of avocado toast, if only for the irony.