The housing market is a fluid beast that changes with each generation and economic turn. As real estate professionals, our job is to anticipate trends and look to the future. Currently, Millennials and Baby Boomers are two of the real estate industry’s biggest influencers.
If you’re in the home remodeling business, you’re in luck. Experts predict that home renovations will be increasingly commonplace within the next 10 years. This is because of the Baby Boomer generation. Eighty percent of Baby Boomers own property, and two-thirds of them wish to age in their current homes.
What this means is that properties will be modified for comfort and accessibility. We’ll likely see anything from wheelchair ramps and wider hallways to walk-in showers instead of tubs. For those with the ability to modify their current home, it also means they won’t be putting their home on the market anytime soon.
While Baby Boomers still have a large influence on the market, it will soon be taken over by millennials, who will soon become America’s largest generation.
Currently, millennials are buying more homes than members of any other generation. This also means they’re buying more products, such as furniture and basic home necessities.
The increase in homeownership still isn’t near pre-recession levels, but it is a good sign. Economic recovery is a major contributing factor, allowing those in their twenties and thirties to earn more at their jobs and afford larger purchases.
Another factor is fintech. By using data science, well-qualified individuals can now access mortgage lenders. The traditional way would often bypass these qualified people, leaving them secluded from the housing market.
With more millennials able to buy homes, that means the homes will need to be tailored to their desires and needs. For example, Baby Boomers preferred detached suburban homes. Some experts predict that these larger homes in the suburbs won’t be as appealing to younger generations. The price will be too high, and the property too large for a starter home.
A quarter of millennials prefer urban housing, such as townhouses and condos. So when Boomers are selling their homes, will there be enough buyers demanding the supply? The prediction is that there won’t be because Generation X (between Boomers and Millennials) is significantly smaller.
To accommodate demand, more houses will need to be built for Millennials. Younger generations have different priorities than their predecessors, such as greener materials and smaller homes.
According to Harvard projections, 90% of buyers in 2035 will either be under 35-years-old or over 70-years-old. The challenge will be anticipating the future needs now to mitigate a housing crisis.