Over 72 million millennials reside in the US, and a large percentage of them aspire to own a home. As per Zonda, 98% of millennials plan to purchase a house at some point in their life. The reasons for this decision can be diverse. The graph below demonstrates why millennials are choosing to become homeowners, according to Zonda's sixth annual millennial survey.
The leading causes include building equity, transitioning into a new life stage, seeking stability, increasing home values, and wanting to personalize their living space. Here is a more detailed explanation of each reason.
Building equity through homeownership is a key reason why millennials are buying homes. When you buy a home, you make monthly mortgage payments that go towards paying off the principal balance on your loan. As you pay down the principal, you build equity in your home, which is the difference between the value of your home and the amount you owe on your mortgage.
Owning a home is a long-term investment that can help you build wealth and increase your net worth over time. This is because homes typically appreciate in value over time, meaning that the value of your home is likely to increase over the years. If you sell your home in the future, you may be able to sell it for more than you paid for it, which can provide a significant return on your investment.
In contrast, when you rent a home, you don't build equity in the property. Instead, you're essentially paying for the use of the property for a set period of time. When your lease is up, you may be faced with rent increases or the need to find a new rental property.
Furthermore, renting can often be more expensive than owning a home over the long run. Rents have risen dramatically in many areas over time, and there's no guarantee that they will stop increasing. When you own a home, your monthly mortgage payments are typically fixed, which can provide a greater sense of financial stability and predictability.
In summary, building equity through homeownership can help millennials build wealth and become more financially stable over the long run, while also providing the potential for significant returns on their investment.
As millennials reach their prime homebuying years, a change in their life stage may be a key reason why they are buying homes. For many millennials, this change could involve needing more space, a different location, or a change in lifestyle.
For example, many millennials may be starting families and require more space for their growing families. They may need extra bedrooms for children or additional space for a home office. Owning a home can provide the stability and security needed to raise a family, as well as the opportunity to customize the home to meet their specific needs.
In addition, millennials may be at a point in their careers where they are looking for new opportunities or need to move for a job. Owning a home can provide the stability needed to make a career change or move to a new location. It can also offer the opportunity to build equity in a desirable area, which can increase their net worth over time.
Furthermore, millennials may be looking to change their lifestyle, such as moving to a more walkable or bikeable neighborhood, or a community with more amenities, such as parks or local restaurants. Owning a home can provide the opportunity to live in a desirable location that meets their lifestyle needs.
In summary, a change in life stage is a common reason why millennials are buying homes. Whether it's the need for more space, a different location, or a change in lifestyle, owning a home can provide the stability, security, and flexibility needed to meet these evolving needs.
As a real estate agent, I understand the importance of homeownership and the benefits it can bring to your life. If you're a millennial considering buying a home, now is the time to take advantage of the market and start building equity, finding stability, and creating a space that is truly yours. Whether you're looking for your first home or your forever home, I'm here to help guide you through the process and find the perfect property to fit your needs. Don't hesitate to reach out to me to start your journey towards homeownership today!