There’s a cutting joke out there about millennials living in their parents’ basements. The punch line is something about how millennials refuse to grow up or some other Freudian concept I don’t buy. In reality, millennials—like pretty much every other generation—value independence. In fact, according to CNBC, 80% of millennials want to buy a home of their very own. But, as Business Insider reports, the rate of millennial home buying in the U.S. is at a record low.
Homes did not stop getting built, so if there’s a supply and there’s a demand, why aren’t I—along with the 74.5 million other millennials—living in our own Tudor-style starter cottages? (Note: not owning a home has not stopped any of us from watching House Hunters or making Pinterest boards filled with tile ideas for future bathrooms.)
The Rate of Millennial Home Buying is Slowed by Debt and Underemployment
Part of the reason is because millennials are delaying other milestones that often precede home buying, like getting married and having kids. Another is because there’s a trend amongst millennials to buy experiences rather than things, so while your nearest millennial might be renewing a lease on their apartment, they’ve also probably been out of the country in the past few years.
But let’s be honest: the main reason millennials aren’t buying homes is because millennials as a generation are dirt poor. The economic collapse left many would-be retirees keeping their higher-paying jobs and student loan debt was at $1.44 trillion at the end of Q1 this year. CNBC also reports that 44% of millennials have not saved a single dime towards a down payment, and it will take about 10 more years before we have a shot at home ownership.
Millennials are Leery of Large Purchases
Then there’s the psychological scars the recession gave my generation, resulting in some serious trust issues with banks and the housing market. We are just a few more DOW dips from hoarding our money in coffee cans buried in the backyard. Couple that with the fact that we have so little money to begin with, and the average millennial has to weigh the pros and cons of splurging for guacamole on their burrito.
When a millennial makes a big purchasing decision, we do it methodically and after much consideration. Forget making an offer on a house—it’s a lengthy road to get a millennial to even consider starting to look at homes versus an apartment or other rented.
Low Buying Rates Negatively Impact Other Industries
Millennials aren’t the only ones suffering. The reality is that almost every industry benefits from a home purchase. It opens up the door for financial services, insurance, retail, and a host of other related industries. Buying a home isn’t just buying a house—it’s buying the sofas, and the lawn mower, updating the plumbing, and a million other incremental costs. In terms of an economic ripple effect, purchasing a home is like dropping a rock in a pond.
Marketers Should Still Target Millennials
As horribly depressing as all this information may seem, the fact remains that 80% of millennials want to a buy a home, so we’re still a great target audience for marketers. We just need to be approached the right way—starting with these basics:
- Build a relationship. Consider your millennial audience like a frightened deer. Slowly make your presence known and build trust. Be sure we know you’re a resource for when we’re ready to start looking at homes.
- Provide helpful content. Because many millennials aren’t quite ready for the home-buying process just yet, make sure you position yourself as industry experts by offering helpful tools and information on home buying without pressuring action from us. (Remember, we are frightened deer.)
- Emphasize cost–effective options. Since the idea of buying a home isn’t a hard sell for millennials, market to our biggest concern: money. Offer suggestions or promotions that will help us feel more comfortable spending our hard-earned money. (Even frightened deer appreciate savings.)
There are a lot of barriers to getting millennials “out of their parents’ basement” and into their own homes, but it’s not impossible. If you’d like some more insight to the millennial mind (and buying power), subscribe to SpeakingDIRECT and download our Marketing to Millennials blog compilation today.
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