Coming of age during the most challenging economy in decades, Millennials had to delay gratification in many areas including owning their own homes. Now they want to make their first home count.
They know the smart approach is to buy within their means and remain in their homes for as long as possible. That's the most reliable path to building equity.
Millennials want less, but more.
To get the most important features and amenities possible for their money, Millennials understand that bigger isn't always better. More square footage also means higher maintenance and utility costs. In order to go more green, and make a smaller footprint, Millennials are more likely to sacrifice space for quality sustainable materials that save on energy costs.
Millennials aren't just cost-conscious – they're juggling heavy student loans in a sluggish job market, making them defer homeownership much later than previous generations. They've had plenty of time to polish their dreams into tangible goals;
They want to avoid making the mistakes of previous homeowners, such as overspending for a home. Affordability is paramount.
Millennials understand compromise. They may prefer homes that are updated and move-in ready, but a home that needs a little work in the right neighborhood at the right price won't discourage them. They know they can go online and learn how to tile the bathroom or install the sprinkler system by themselves.
Suburban homes may be newer, larger, and sport more luxury features but Millennials are reclaiming older homes in the inner city. They enjoy walkable neighborhoods that offer color and character. They're also closer to restaurants, parks, cultural activities, shopping and most important, jobs.
According to a 2013 survey by building giant Pulte, Millennials are buying with economy and quality in mind. If they are compromising on space, they want open floor plans with flexible space that they can use how they want. They don't want wasted space, such as formal living rooms that are rarely used.
They own and use more technologies, so they expect a home to be wired for modern use. They're more likely to use a formal dining room as a workspace or home theater than to serve food. They value outdoor space to extend their living space and expand their entertainment options.
Many Millennials waited to form households, marry and have children, so as first-timers, they are less likely to want traditional family homes. They are more open to buying condominiums, townhomes, rowhomes and smaller homes in walkable neighborhoods, closer to jobs and amenities.
Because they carry high personal debt, Millennials look for homes that are move-in-ready. If a home needs work, Millennials are likely to seek a discount on the price, and turn to YouTube and HGTV for ideas on how to improve their home. They're more patient with a longer timeline for improvements.
Advice for sellers
Sellers, take note. The eldest of the 90-milion-strong "Millennials" are 31 years old, and they're driving first-time homeownership demand.
While previous generations of homebuyers were content to look at homes online, Millennials may share a seller's listing with hundreds of friends on Facebook in order to get their opinions. Unlike investors, who seek bargain homes in less than move-in condition, Millennials are more likely to ridicule and shun homes that need obvious work.
The reason is that buyers who don't have experience with home maintenance tend to be more wary of renovations, says The National Association of REALTORS®.
Sellers should make the listing appealing by making necessary repairs and updates before putting their homes on the market.
