Research from Zillow finds millennial values toward homeownership may be more traditional than older generations.
It’s no secret that as more millennials reach homebuying age they’re opting to remain renters in lieu of entering the market. However, despite what many have described as their aversion to the process, results from the latest Zillow Housing Confidence Index found that young adults are optimistic about homeownership overall.
Basing its results on the Housing Confidence Survey, which reaches upwards of 10,000 Americans across 20 metro areas, the ZHCI revealed that while it’s unlikely we’ll see an outpour of millennials into the homebuying market within the next year, they could soon overtake the majority as the industry moves closer towards a balance.
Over the next 12 months, 36 percent of renters aged 18-34 admit they expect to enter the homebuying market. Extend that timeline to one to two years and that number jumps nearly 20 points to 54 percent, making them the new majority of expected homebuyers.
Young People Believe in The Value of Homeownership
Zillow’s index went on to further examine the current relationship between young renters and the homebuying and selling marketing, finding that:
- 55 percent of renters age 35-64 expect to purchase a home within the next year, but that number drops significant to 43 percent if you move up the buying timeline to one to two years.
- Only 30 percent of people aged 50-64 believe owning a home is necessary to being a respected member of society, compared to nearly half of millennials.
- For people age 35 and up, approximately 60 percent look at owning a home as imperative to personal freedom, compared to 74 percent of millennials.
Millennials Share a Positive Outlook
What the ZHCI shows us is that millennials still see value in homeownership, and, in many cases, more so than the generations immediately preceding them. Among adults age 35-49, 59 percent agree that owning a home is the best long-term investment a person can make – 6 percent less than young adults age 18-34.
The most revealing aspect of Zillow’s research is that these attitudes are not relegated to one particular area, but rather spread out across the nation. For instance, when asked if owning a home was necessary to living “The Good Life,” the majority of positive millennial responses came from Miami (82 percent) and Detroit (76 percent).
Considering that about one-third of young adults expect home values to increase by at least 7 percent per year over the next decade, several points higher than any other age group, it’s reasonable to assume that millennial interest in homeownership is only going to grow as the industry continues its ascent to normalcy.