LOVELAND — Jessica Lautz, armed with statistics, became a myth-buster Tuesday morning about the home-buying habits, or lack thereof, of millennials.
Lautz, the National Association of Realtors’ managing director of survey research and communications, said millennials, age 19 to about 37, want to be homeowners, despite what is written in the media. Lautz made the remarks Tuesday before a crowd of 375 people attending the keynote address during breakfast at BizWest’s inaugural Northern Colorado Real Estate Summit at the Embassy Suites in Loveland, The myths she said are that millennials “never want to own anything, will buy everything online — even a home — and that information online replaces word-of-mouth.” She said the myths can be dispelled through NAR research. She said that eight in 10 people say owning a home is still part of the American Dream, and that nine in 10 people want to buy a home sometime in the future. She also said that millennials, the largest generation, don’t all want to live in an urban center, instead, they are buying single-family homes in the suburbs.
But there are factors that are preventing millennials from becoming first-time buyers. Student debt and rising home prices spurred by low inventory are the two main culprits. “The median student debt nationwide is $41,200, and the median income of millennials is $38,000,” Lautz said. “Saving for a downpayment because of rising rents and student-loan debt is difficult.” She said 87 percent of potential homebuyers think they need a 10 percent down payment, when they really only need about 5 percent. Lautz said the inventory of homes for sale are at an historic low, driving prices up and pricing people out of the market. She also said that one-third of first-time homebuyers are able to make a purchase only because they are getting a gift or loan from parents or relatives. Boomer myths While much has been written about baby boomers wanting to downsize when selling and buying a home, Lautz said statistics prove they are buying similar size spaces. “Everybody wants a 2,000-square-foot home,” Lautz said. She added that boomers are staying in their existing homes longer.
Lautz said buyers first and foremost are looking for honesty and integrity in an agent and want help throughout the home-buying process. While technology is permeating the industry, buyers still want a personal connection and are still relying on recommendations through word-of-mouth to find an agent for a good experience, she said. Lautz said 87 percent of buyers use agents, including about 50 percent of those buying directly from a builder. Sellers want agents to handle the marketing of their home, to sell it in the time frame needed and finding that “qualified” buyer. “In the past three years, only 8 percent of sales are by the owner, way down from 20 percent in the 1980s,” Lautz said.