The common belief is that most young adults are living in large cities and popular metro areas, but a new report published by the Urban Land Institute shows that is not necessarily the case [1].
Many millennials are deciding to move to affordable neighborhoods where they make enough to pay their bills. Others are choosing to live with their parents or relatives to save money. Only 13 percent of young adults live downtown or near downtown. Meanwhile, 63 percent of young adults live in suburbs or city neighborhoods outside of the centrally located district.
But in spite of any lifestyle or financial restrictions, most young adults are positive about the future, which includes their chances of acquiring a home.
"In general, millennials are an intriguing combination of optimism and realism," Lachman said. "They have high hopes for themselves in the long term, despite having to temper their short-term expectations. They are proving adept at making the environment in which they currently live fit how they want to live, while not losing sight of how they see themselves living in the future."
Millennial living choices will have a huge impact on the way urban regions form throughout the 21st century, Lachman said.
Millennials are Getting into the Market
First-time homebuyers accounted for nearly 6 of 10 home tours conducted by agents in the first month of the year, the highest rate in recent years, according to the Los Angeles Times [2]. Home-purchase education classes also increased by 27 percent year over year in January, the Times stated.
"I think it is significant," Nela Richardson, Redfin's chief economist, told the Times. "They are sticking a toe in the water."
While it's largely uncertain how long the surge in interest among potential first-time buyers will last, the market is in good shape for new buyers to acquire mortgage loans and make investments in housing.
Millennials and Housing by the Numbers
The Great Recession is still showing some lingering influence, especially for millennials who graduated during that time and struggled to find employment. In all, 21 percent of young adults still live at home, according to the study from Urban Land Institute. But optimism is prevalent. Only 10 percent of those living at home anticipate sticking around for another five years.
The Washington Post pointed out that many people are quick to mention the economy as a reason for young adults to move back in with parents or relatives, but it's also because of changing social ideals [3].
Millennials are waiting longer to get married, which in the past was a huge motivator for people to acquire their own home.
Others are choosing to live with their family simply to gain a fiscal advantage. While some people can afford to live on their own - and possibly even buy a home - they are choosing to live with their parents so they can save up money. Trying economic times have also made it culturally acceptable for young adults to live at home, something that wasn't necessarily the case a few decades ago, the Post reported.
Thirty eight percent of millennials consider themselves savers, according to the Urban Land Institute. Meanwhile, 30 percent consider themselves spenders, and 32 percent fall in both categories.
Sources:
[1]. Young, Hip And Not Living It Up In The City: New Urban Land Institute Report Shows Gen Y Living Frugally In More Affordable Locations, Sharing Housing With Friends, Family
[2]. Millennials are finally entering home-buying market
[3]. Everyone's freaking out about Millennials living at home. They shouldn't.
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