Strong Economy Fueling Millennial Home Demand

Plenty of data has shown that Millennials have been eschewing homeownership more than previous generations. That trend may now be reversing according to data from HomeLight, a company that utilizes complex data analysis to better understand real estate markets across the country.

“Millennial is a broad term, but when we look at our data, we are seeing more homebuyers in their thirties,” HomeLight spokesperson Matthew Proctor said. “That’s a lag compared with Baby Boomers and other generations who were buying closer to age 26 or 27.”

The data suggests that the decision for many to delay home ownership was driven more by financial considerations than cultural shifts. On average, Millennials incurred significantly more student loan debt than their parents and grandparents. That, coupled with a sluggish job market, discouraged many of them from taking on mortgages. Now that they are getting established in their careers and paying off some of that debt, they seem more inclined to pursue a traditional single-family home.

“When we started to dig deeper into it, what we saw was the strong economy,” Proctor said. “It’s a positive trend over that past couple of years and it’s putting more money into the market.”

HomeLight’s statistics are based on real estate transaction data that is fed into algorithms designed to help homebuyers and sellers make informed decisions. The analysis, which drills down to the neighborhood level, allows them to compare agents on an objective performance basis.

“We can actually tell statistically based on an agent’s historical performance if they are likely to sell your house faster and for more money than other agents in your area,” Proctor said.

As expected, the data shows that the Dallas market continues to be one of the nation’s strongest. The city’s overall transaction volume has continued to steadily rise. Every summer since 2014 has seen more sales than the previous year. And while no algorithm can predict the future, present data suggests that the market is likely to stay strong in the near term as expected job growth continues to fuel more home demand.

Another national trend HomeLight’s data has confirmed is a subtle shift back to the suburbs after years of migration into the city. Many of the factors are familiar such as affordable housing, less congestion and better schools. However, another increasing consideration may be technology. The ability to effectively carry out job tasks remotely has reduced the need for a daily commute. Many employees are now only required to make occasional in-person appearances, eliminating another inventive for living near central business districts.

Looking into the future, self-driving cars could make living in the ‘burbs even more appealing. Hours spent sitting in traffic could be turned into productive time as commuters fire up their laptops (or future equivalent) the second they start the car. And while this may seem far-fetched to some, Proctor notes that his workplace, like many other companies, has locations in multiple cities that essentially work as one. HomeLight even has robots with mobile cameras that are used for communication between locations. In other words, the future may not be as far away as some people think.

“If we think about what transportation can be, it only seems logical that people will be able to live where they want to live,” Proctor said. “If suburbs by their very nature are more affordable and give you more land because you can expand outward versus up, it seems like a natural progression. “