Millennials now make up 43% of home buyers, which is the most of any generation, and an increase from 37% last year. Even as they delay marriage, kids, and reject their parents’ version of adulting, Millennials still desperately want a place to call their own.
In fact, over half of millennials say their urgency to own a home has increased in the past year, driven by wanting to raise a family, hope for better living conditions, and —understandably — being tired of paying rent to a landlord.
Yet amidst low inventory, high competition, and rising costs and interest rates, many millennials have lost hope that they’ll ever achieve the American Dream. At Opendoor, we decided to dive deeper into the members of this generation who have never owned a home. We call them ‘unmortgaged millennials.’
What is an unmortgaged millennial?
Those Millennials who have not yet checked the “homeowner” box are eager to make the transition — and many would make some big sacrifices to be homeowners. In fact, most would give up TikTok and Instagram in order to own their dream home (73%), and even more (78%) would give up alcohol.
Furthermore, nearly half (47%) say they would delay vacations for five years if it meant they could buy a home, and 41% would even delay a wedding for five years!
For these unmortgaged millennials, the reward of owning a home outweighs any sacrifices. So how can agents help these aspiring homeowners fulfill their dreams? Here are three takeaways from our research.
Affordability is the top barrier to home ownership
Our research revealed that rising home prices are the most commonly reported challenge to homeownership (45%), and compounded with low income (42%), nearly half of respondents aren’t sure they’ll ever be a homeowner (49%).
However, this group still ranks a down payment as the number one most important financial milestone, even when compared to saving money for a new car (21%), travel (22%), and paying off student loans (29%).
Complicating matters is that only 20% of those polled have saved enough for a down payment, and only 12% say they can actually afford to buy a home right now. More than half (56%) have less than $25,000 in total savings, and 51% say they’ll need at least $25,000 more to make a down payment where they live.
Agents should educate their customers about low down payment options for homes, and help them understand if these programs are right for their financial situation. Additionally, agents should help their buyers be fully prepared to make their offer as soon as they find a home they love — with all their paperwork prepared and any outstanding financial issues resolved, so that they can make the deal exactly when needed.
Finding a dream home takes priority over finding a partner
Forget Hinge and Tinder. Unmortgaged millennials value their real estate apps ahead of dating apps, travel apps, and sports betting apps. And speaking of romantic prospects, unpartnered and unmortgaged Millennials see no issue in buying solo, as one-third say they’d buy a home on their own.
As further support for single homebuyers, NAR’s latest Homebuyer and Seller Generational Report found that 19% of recent buyers were single females and 9% were single males, with Millennials making up a growing percentage of this group. Single buyers have unique needs from married buyers, and agents should arm themselves with the knowledge needed to serve this demographic — whether it’s addressing specific financing questions, or the home and neighborhood features that are most important to them.
Digital tools are here to stay
NAR’s Generational Report revealed that almost two out of three younger Millennials found the home they ultimately purchased on the internet. While real estate scrolling is a popular pastime for all generations, a recent study we conducted found Millennials outpace other cohorts, with 72% browsing for real estate actively.
They’re turning to less traditional sources, too: 26% of millennials regularly use TikTok, while even more use Instagram (33%) and Facebook (36%) at least a few times per week. There’s a big opportunity for agents to reach and engage this audience on social media platforms through creative and educational videos and short-form content.
We also found that this generation is more comfortable with buying and selling digitally than older generations — more than 70% of millennials. Agents should continue to market to potential clients through less traditional sources, and also give their clients more digital tools to help them beat out the competition. For example, there are more options now to work with companies that help buyers make an all-cash offer on a home—which can be more attractive to sellers in this hot market.
Millennials’ desire to own a home remains strong, even in a challenging housing market. Agents can engage this aspiring group of homeowners by educating them about all of the options they have on the table, such as innovative ways of buying and financing the home, or low down payment options.
By providing education and resources, agents can help make home ownership more affordable and more attainable for millennials across all their unique stages in life, whether they’re starting a family or buying solo.
Will Holmes is the head of agent growth for Opendoor.