Housing experts in the Twin Cities are taking note of how Millennial homebuyers are predicted to play a major role of influence in the Minneapolis - St. Paul real estate housing recovery.
August 6, 2014
National housing thought leaders at Trulia are forecasting that the whims and wishes of Millennial age homebuyers ; they will be a reckoning force in the future of the housing market.
As would-be home buyers, Millennials are exceptional in that they know what they want. Being raised on the Internet, they quickly gather recommendations and learn from other's home buying experiences. This helps them sort more quickly through a home's features and neighborhood demographics over other age buyer groups. Granted, they are picky; as our future work force and buyers who can afford a home loan, they have reason to be.
Young adult home buyers have already proved they merit the attention of Twin Cities home sellers.
Millennials Choose the Twin Cities For Practical Reasons
Millennials don't mind relocating to a city where job growth is strong and homeownership can be grasped. Austin, Texas and Salt Lake City were called out as the star performing cities for Millennials due to their ability to count on job growth rates and the appeal of affordable home prices. The study found that 7 of the 10 metro areas that ranked highest are in the Midwest and West. The Minneapolis-St. Paul-Bloomington, MN-WI Metro Area ranked 5th best.
Lawrence Yun, NAR chief economist, announced the latest number for national homeownership rates among young adults under the age of 35: they peaked in 2005 at 43 percent and tumbled to their lowest of 36 percent in the first quarter of 2014.
Predicting the Muscle of Twin Cities Millennial Homebuyers
There is a great deal of discussion in the news today about the potential of Millennials to refuel the housing market. The weight of their potential buying power is undeniable. There is no doubt their influence will play a key role in the nation’s economic recovery.
According to new research by the National Association of Realtors® (NAR), Minneapolis - St. Paul is ideal for first-time homebuyer given the metro's economic growth. The Twin Cities housing market offers home prices that rival many other metros of size. High income earners made the region the second-most affordable housing market in the nation last year; it is also notable that 20-34 year olds make up more than one fourth of all new occupants.
NAR chose to limit its research to only leading edge Millennials between the ages of 25-34 for inclusion in this study. The decision was based on the logic that this segment of Millennials are better suited to become future home buyers.
The Question Remains if Millennial Homebuyers Will Actually Purchase
According to the Census Bureau's chart showing annual homeownership rates per age group, currently only a mere 35% of Millennials own property. Some specifically targeted Mellinnal home purchases are at Urban single-family homes. Often Millennial homebuyers find it difficult to grow where they need to financially at their present place of full-time employment. Young people may be more reluctant to purchasing a home that will take over 5 years to gain sufficient home equity so they can move if needed. Millennials are in the thick of career planning; if it looks like the raise they want means a different job across town or in another location altogether, they aren't planning to live in one home for a long time.
The research confirms the flexibility that Millennials have; they don't mind relocating to a city where job growth is strong and homeownership can be grasped. Austin, Texas and Salt Lake City were called out as the star performing cities for Millennials due to sustained job growth rates and the appeal of affordable home prices. The study found that 7 of the 10 metro areas that ranked highest are in the Midwest and West. The Minneapolis-St. Paul-Bloomington, MN-WI Metro Area ranked 5th best.
Future Millennial Homebuyers Are the Upcoming Forces of the Twin Cities Housing Market
* Share of Millennials to the total Population (2010-2012)- 14.9%
* Share of Millennial Movers to Movers of any age (2010-2012) - 26.7%
* Median Price Growth (2012-2013) - 14.2%
* Affordability Index (2013) - 227.0
"Millennial homebuyers may be perceived as individuals known for sitting around cracking jokes and laughing about the thrills of buying a home without the experience of knowing the responsibilities of being a homeowner. In my follow-up conversations after closing and moving into their new homes, younger home buyers show amazing capabilities and gratitude. Perhaps they have observed and learned a lot from their parent’s disappointments during the housing bust." ~ Jenna Thuening, owner of Home Destination
Download NAHB's Report on Best Purchase Markets for Millennial Home Buyers
Download the National Association of Realtors report on Millennial Generation Home Buyers
Download the University of Minnesota and Metropolitan Study of Twin Cities Developers and Business Leaders on Housing for Millennial Generations and More
Whether your goal is to be a Millennial buyer in the Twin Cities closing on a home for the first time or are a move-up home buyer, I would love to hear from you. Call me at 612-396-7832. By partnering togehter you can be assured that buying a home will be a fun and rewarding experience.
Jenna Thuening, a Twin Cities residential Realtor reports how Millennial homebuyers predicted to boost Twin Cities housing market.
Eden Prairie MN 55344
Jenna's home page: homedestination.com
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