1. Millennials—The Home Buyers of Tomorrow
The 2014 California Association of REALTORS®
Millennials Survey looked at those born between
1980 and 1996, or 18 to 34 year olds, who currently
live in California. The Survey focused on renters and
home owners and found that one in five are
homeowners, 41 percent are renters and 36 percent
live with their parents. When looking specifically at
18-26 year olds, the Survey revealed that nearly half
(49 percent) live with their parents.
Demographically, they are very diverse—62 percent
are minorities. This generation is known for delaying
marriage and having children; the majority are not
married and nearly half do not have children. They
are, however, well educated; 46 percent of 27 to 34
year olds have a college degree and 42 percent of
18 to 26 year olds are currently enrolled in a college.
Despite many having a higher education, their
earnings and employment have some catching up to
do. Only about half of echo boomers are currently
employed, and only one-third have a full time job; 19
percent have a part time job, 24 percent are students
and 20 percent are unemployed. This bleak
employment situation translates to a median annual
income of $35,000. There is a silver lining for
earnings; older millennials (those between 27 and 34
years old) have a median annual household income
of $50,000, compared to $30,000 for their younger
cohort (18 to 26 year olds).
Renters
Approximately two out of five millennials are renters,
paying a median monthly rent of $1,075. Affordable
rent is the most important reason for electing to live
in their current residence and also why the majority
rent instead of buying—67 percent said they rent
because they cannot afford to buy.
While they may not be able to afford to buy a home
now, most Gen Y renters feel that homeownership is
important because it gives them the freedom to do
what they want with the property, and they expect to
buy a property within the next five years.
Echo boomers in California prefer single family
homes, as two out of three indicated they plan to
purchase a single family home, compared to only 12
percent who plan to purchase a townhome or
condominium. Contrary to popular belief, the ideal
home for many would be on a big lot with lots of land
(42 percent) in the suburbs (41 percent). Fewer than
one in three indicated an urban location preference
for their ideal home.
While they aspire towards home ownership, the
majority are uncertain or doubtful they could obtain a
mortgage now. Millennials are realistic about the
responsibility that comes with the territory. Affordable
home price, problems with credit/mortgages/taxes
and maintenance are some of their biggest concerns
about home ownership. About half of Gen Y renters
have student debt, which is below $20,000 for many,
so they do not feel it is preventing them from
qualifying for a mortgage. However, the majority
have other debt, such as credit cards and auto loans,
which would make it difficult for them to buy a home.
Brought to you by:
Robert Leidig
REALTOR®
Century 21 Town & Country
3700 Inland Empire Blvd. #150
Ontario, CA 91764
Office: 909-204-5800
Cellular: 909-957-7661
Email: rle3491929@aol.com
BRE License: 01422758