A recent study of 28- to 32-year-olds by Trulia found that millennials — particularly the older members of that generation — are more like previous generations than most realize, and they are facing many of the same challenges.
For 28- to 32-year-olds not living with their parents, 39.1% owned compared to 63.2% of those ages 33 to 55 — the biggest gap between the two age groups since the question was first measured in the mid-1970s.
Millennials also are losing their earning power. In 2016, 28- to 32-year-olds earned 78.2 cents for every dollar earned by 33- to 55-year-olds, which is lower than the 92.4 cents earned by the younger group for every dollar earned by the older group in 1963.
Millennials were some of the hardest hit during the Great Recession, with many entering the job market as the market was crashing. Slow employment growth and skyrocketing student loan debt levels have made investment purchases like a home more of a challenge for this generation, as well.
Along with direct financial constraints, millennials are heading into the homebuying arena at a time when inventory is constrained and entry-level product offerings are particularly low. That is because builders have favored the financial stability and credit access of move-up and high-end shoppers. In the first quarter of 2017, for example, the supply of starter homes fell 8.7% while prices climbed 8.3% from a year earlier.
Still, the luxury home market is showing signs of slowing, RCLCO reported, and some builders are beginning to develop offerings in more moderate price points.
Products targeting millennial and first-time buyers, specifically, include Toll Brothers’ T|Select, Meritage’s LiVE.NOW. and D.R. Horton’s Express Homes. Pulte executives told investors and analysts during the company’s Q1 2017 earnings call this week that entry-level product will be a part of its leadership strategy, too.
For builders zeroing in on millennials, Inman noted desirable features include a central location, smart-home technology, smaller footprints, open floor plans and home offices.
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