Within the past year, millennials have risen to the top in becoming the single largest generation of Americans. There are currently around 84 million members of this thriving demographic, outnumbering the once-dominant baby boomer generation by nearly 10 million. Naturally, being the largest age group in America, millennials have a lot of power in shaping the future real estate market, which is why it’s so critical to pay attention to their views on real estate investing and other investing opportunities.
8 Ways Millenials Affect the Housing Market
1. Cost savings
According to the NAR report, home purchases soar up to 13 percent among multigenerational households. A multigeneration household primarily consists of adult siblings, adult children, parents and/or grandparents. The data represents younger boomers representing a huge segment of multigenerational buyers. The majority are the ones who said that the primary reason for the purchase is because the adult children are moving back into their house.
2. Wage growth
Recession subsided in the last quarter of 2014, and with this, companies have initiated the hiring spree once again. There are millennials, who have managed to survive the pressure of recession and performed well, have been rewarded with a good boost in their remuneration. Moreover, there are sectors such as oil and gas, as well as engineering and health care, that have seen a major boost in the past few quarters. Individuals, experienced or fresh talent, who are entering the fields are getting good pay packages and thus have a high purchasing power to rotate money in the sector.
3. The technological boost
Regardless of their age, the young homebuyers are fast approaching the World Wide Web for their dream home. More than 88 percent of real estate investors voyage through real estate portals for a home to satiate their selling or buying needs. Millennials are making use of mobile apps, Internet and various other online services to get the task done. Technology has given a good boost to each sector, and real estate is no exception. The vulnerable millennial era has also not been able to escape the charm and is rotating money accordingly.
4. A look at the regions
A common thread that runs in the millennial herd is their inclination toward city living and high propensity to rent. These two factors have contributed to urban transformation, a sharp surge in the demand for apartments and a range of development activities in different parts of the world.
Global markets, such as the real estate market in India, America, Europe and Canada. There are cities including Bangalore, Hyderabad, Boston, Seattle and similar regions that are flocked to by young professionals and individuals at a very high rate. The real estate markets in these prominent countries are affected by the millennials and their mushrooming investment activities in a positive way.
Global real estate market contributes more than one-fourth of the economic GDP, and this is how millennials are helping the global market.
5. Commercial realty factor
By the year 2025, millennials will cover more than 75 percent of the global workforce. This is one demographic that has not been raised by the office landlords lately. The commercial market is one of the integral parts of any real estate market. The young generation is interested in living in a locality that places them closer to their work setting. The builders realize that fact and thus are increasingly stationing commercial hubs in such areas. Movement of millennials in big cities for work and a better life has also given a boost to the global real estate market, and thus the world’s demographics are changing.
6. Economic turbulence for good
Foreign investors might still find high-end real estate markets like that of America or India lucrative, which owes to economic turbulence in their home countries. This can be explained by the famous example of the U.K., which is toying with a so-called “mansion tax,” and then there is another case of China, as well.
China has put restrictions on home purchases in urban cities. Further, the foreign money rotators also fear currency fluctuation, which results in a devaluing of money they hold in their home countries. The swapping activity is actually positively affecting the real estate markets of targeted countries.
The nations are benefiting each other, and this is another aspect that is well-supported by the millennials as migration is also happening at the very same rate.
These are some of the highlighted factors that are affecting the global real estate markets in the coming years. The younger generation is ruling the business, as well as the professional arena, and is giving a good boost to the entire market.
7. Raising Up the Neighborhood
Millennials will move to cities for several reasons including low cost of living, economic opportunity and general quality of life. The following U.S. metropolitan areas had the highest and lowest young adult growth in 2010-2015, according to the Millennial Generation report which was released by the Brookings Institution in January 2018. Each of the 10 fastest-growing areas below—with growth rates exceeding 10 percent—is located in the South or West.
8. Real Estate Investing
Millennials are most likely to value real estate over the stock market.
Thanks to the economic downturn of the Great Recession, most millennials graduated from college and entered the job market when it was rather difficult to find employment. Millennials have watched the stock market crash and burn, and watched as it negatively impacted their parents’ lives.