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If builders had to pick a generation to focus on, hands down Millennials are the demographic to watch. Though there has been a lot of buzz about the Silver Tsunami, it may not be coming anytime soon. Boomers aren’t budging: Only 17 percent of them are currently dissatisfied with their current home, and some do not have the savings to move. Instead, builders may have more luck focusing on Millennials, who will account for 50 percent of mortgage originations in 2020. They’re young, they’re ready, and they finally have enough money to afford a mortgage—emphasis on just enough. This generation is focusing on affordability, looking for reasonably priced homes in smaller cities such as Boise, Idaho, or Tucson, Arizona. Only 16 percent are looking to buy in an urban area while 45 percent are seeking homes in small towns. By studying Millennial trends, builders can better prepare for the future of homebuying.
Markets in the South and West will experience the highest housing activity in 2020, as more millennials move out of big cities in search of more affordable markets, according to experts who shared some of the latest industry trends during last week’s International Builders’ Show in Las Vegas.
“Millennials will dominate housing in 2020 and account for 50% of mortgage originations,” said George Ratiu, a senior economist at realtor.com. He added that they will be leaving expensive metros for more affordable markets.
“Millennials will be moving to mid-sized cities like Boise, Idaho; Tucson; Chattanooga, Tennessee; and Columbia, South Carolina. These cities offer good weather, suburban downtowns and lifestyle amenities.”
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