Millennials in the American Real Estate Market
Millennial or Generation Y is the people born between 1981 and 1997. This is the largest population group of the USA which is 35% of the USA population (US Census Bureau, 2018). Generation Y is quite different than its previous generations. This group of population is more educated, tech-savvy, and is ethically more diverse. The millennial generation is more ambitious and follows a different financial path than their ancestors. That’s why they do critical decisions about their life lately. They marry later in life and buy a house later in life. This is the reason millennial own only four percent of American real estate.
Millennials have not hit 35 years yet, but when they will their finances will be dire. The millennial generation is facing various types of challenges. Prior generations did not face such type of challenges. These challenges are the factors why millennials hold a tiny portion in American real estate. Education debt is a major hurdle for them. They have to pay their debts after getting a job. It took years to pay it. High rental cost is also a contributing factor. A large amount of their income goes into paying rent. It becomes difficult for them to save money for buying a house or investing in real estate. Wealth/economic inequality cannot be ignored. Uneven distribution of wealth is also a contributing factor.
However, things are becoming better. Corporations across the country are changing and updating their policies to meet this generational change. Many members of the millennial who can afford are buying their first home. They are investing more money in real estate business and some are starting their own real estate business. According to the National Association of Realtors, older millennials individuals between the ages of 29 and 38 — accounted for 26% of homebuyers in 2018 They are using technology and modern techniques for growing their business. It is expected that millennials share in real estate business is going to rise after 2020.