So the question is, “Should you be targeting millennials specifically with your marketing”?
I think you should and here's why.
Targeting this group of younger buyers gives investors and rehabbers in particular, a large pool of potential buyers for their finished projects. These folks fit right into the typical 1st time home buyer type of property which is easy to sell to retail buyers.
I am happy to have another guest post today by Satinder Haer of Zilllow, and in today's article she has put together another awesome post with an infographic. Once again, my thanks to Satinder.
Who Are Millennials and Why Should You Pay Attention to Them?
Millennials, those between 23- and 34-years-old, are hungry for homes. Their desire for homes actually surpasses
the rest of the population. When asked, 12.1 percent of the overall population expressed they’d like to buy a home this year while 12.9 percent of millennials plan to buy. That eagerness might be due to their firsthand experience dealing with soaring rental prices while their wages remain stagnant.
Instead of sinking their income into rent each month, millennials want to invest that money into the equity of a home. The question is, can millennials afford to buy and where?
Can Millennials Afford to Buy?
Buyers are waiting longer to buy than in past years, and although that could be the way of the millennial, the market lays out plenty of obstacles causing renters to delay buying. Skyrocketing rental prices make it harder for buyers to save a down payment. Currently, homeowners are spending just 15.3 percent of their income on their monthly mortgages, yet the average renter pays double that amount – 30.1 percent of his or her monthly income.
In some parts of the country, such as Los Angeles, renters spend 48.2 percent of their monthly income on housing. Fortunately for millennials and other renters, buyers with good credit can purchase a home with as little as 3 percent down, depending on their loan type. However, that still doesn’t mean they can afford to buy homes in big cities.
Location, Location, Location
Location is key to millennial affordability. While young adults tend to be drawn toward large metropolitan areas, those locations are not as conducive to budget home purchases. Zillow found that young professionals who apply 5 percent down on a home purchase, spending 30 percent of their monthly income on a mortgage could afford 70 percent of for-sale homes on the market, but that inventory is not split evenly across the nation.
Millennials hoping to live in Los Angeles can only afford 25 percent of the for-sale inventory, a much smaller pool of potential homes than in smaller cities. In major metros, millennials have fewer housing choices than the Midwest or South. Millennials can afford more than 80 percent of the inventory in Louisville, 68 percent in Memphis and 51 percent in Charleston. Millennials hoping to avoid high rental prices, but can’t afford to buy in their ideal cities might need to take a serious look at saving and relocating.
Millennials who hope to buy a home this year can achieve their goal with some research about affordable home inventory and by calculating their realistic housing budget. With millennials gearing up to be the next wave of home buyers, they’ll have to make the numbers work in their favor.
Take a Look For Yourself
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