So many reports have talked about the next wave of millennial home-buyers. What a lot of people may not know is that they’re skipping the concrete jungles of urban areas, and opting for the suburbs.
What are they buying?
Millennials are considered the most educated, but the most in debt of any other generation. Zillow’s chief economist Svenja Gudell says that millennials are beginning to buy cars and houses in the suburbs. Many car dealers and home developers thought urban hipsters weren’t interested in buying homes and cars. Wrong! As they get older, the money grows and so do their purchasing options.
Millennials are the largest group of homebuyers for the fourth consecutive year according to a study from The National Association of Realtors’ 2017 Home Buyer and Seller Generational Trends. When The Recession hit, that put a lot of big decisions on hold for millennials. Home-buying being one of those decisions.
“We’re seeing that the age at which women have kids has also gone up. And so instead of having children in their late 20s, you might start having kids when you’re in your early 30s at this point,” says Gudell.
Why the suburbs?
The Zillow 2016 Consumer Housing Trends Report found that 47% of millennial homeowners live in the suburbs, with 33% choosing an urban setting and 20% opting for a rural area. Generally speaking, the belief that millennials are urbanites doesn’t really hold true with homeownership. The delay in purchasing has actually led to millennials skipping the “starter home” and buying larger homes out the gate.
So how are these millennials navigating the suburbs? According to several recent studies, in SUV’s. Michelle Krebs, an executive analyst at Autotrader says college debt kept millennials out of the car market.
Millennials make up about 30% of the market right now, up 10% from 2011. Kreb says they’ll be 40% before the next decade if the trend continues. Erich Merkle, an economist with Ford says that as millennials start growing families, their cars grow along with them.
“We expect them to carry on as they age with three-row SUV’s and likely go larger because they need the space for the kids that are now teenagers or preteens,” says Kreb.
Ford expects all SUV sales to grow from 40% to more than 45% of the total U.S. new vehicle market within the next five to seven years.
Millennials might just have their stuff together after all.
