Analysts say there’s a “silver tsunami” coming over the next decade as millions of baby boomers downsize for retirement by selling their mid-size to larger homes. The movement is already starting to swell, and if this wave really hits, more than 900,000 such homes could come on the market every year until 2027.
Millennials seem the most likely group to purchase these homes, but the question remains: Can they afford it?
More than 75 percent of non-homeowners between the ages of 25 and 40 say they would prefer buying over renting, but many don’t see it as a viable financial opportunity.
For many, student loans and stagnant wages make it difficult to save up enough to make an initial down payment.
Limited supply has also pushed housing prices near all-time highs, and homeownership can seem daunting.
But millennials still have strong misconceptions about the credit scores and down payment needed, keeping them out of the homeownership game longer than necessary.
In order to market to them, it’s important to help them as they lean toward homeownership.
Age-based cultural differences are becoming increasingly integral to the home lending and real estate industries. Learning to sell them in a language millennial consumers understand is key to the ongoing recovery of the housing market.
For instance, most don’t know there are many federal and state programs allowing down payments as low as 3 percent. They don’t know that a loan applicant’s entire financial picture – including income, assets and debt-to-income ratio, credit history are all also part of the equation.
Studies show younger consumers are a surprisingly responsible group, and those with student loans no worse at managing their debt than people without it.
Turns out, millennials are pretty flexible, too. Once known for clinging to the idea of living downtown, they are flipping the script by bringing downtown where they live.
The term “hipsterbia” refers to smaller, suburban communities with more access to shopping, dining and entertainment options.
Developers are taking notice, transforming buildable land into mixed use residential living, including parks, fountains, parks shops, gallerias and upscale bars. These are becoming “downtowns” for surrounding suburban communities, as well, and point to a healthy future for the entire housing market.