NEW YORK, NY - Millennials will play a critical role in shaping housing demand over the next five years, concludes a new report by The Demand Institute (TDI). They will spend $1.6 trillion on home purchases and $600 billion on rent, more on a per-person basis than any other generation in the next five years. Millennials will make up one in every four dollars spent on housing over this period.
According to the report, there will be 8.3 million new millennial households formed between now and the end of 2018 as these young adults increasingly venture out on their own. While most of these new households will rent, many existing millennial households will purchase homes. The vast majority plan to buy a home in the future.
Released by The Demand Institute, a non-advocacy, non-profit think tank jointly operated by The Conference Board and Nielsen, the report Millennials and Their Homes: Still Seeking the American Dream finds that, in contrast to the common refrain about Millennials, these young adults have similar aspirations and intentions as previous generations when it comes to housing. The vast majority plan to own homes, and nearly all already have cars. Most planning to move intend to have their next home in the suburbs, not the city.
Millennials and Their Homes: Still Seeking the American Dream examines the demand for housing among the youngest adults, who will drive a significant portion of this market over the next five years. This analysis is supplemented with proprietary economic and consumer research. The report is the result of an 18-month research program that includes in-depth interviews with 10,000 U.S. consumers, including more than 1,000 Millennials, along with analysis of 2,200 cities and towns in America and projections of the national and regional U.S. housing markets. The findings offer insight into the forthcoming housing choices of adults aged 18-29 to help business and policy leaders identify opportunities to better meet the needs and aspirations of America's newest household heads.
"A fundamental question about Millennials is whether their coming of age in the Great Recession has shaped their goals and aspirations to be different from those of previous generations," said Louise Keely, President of The Demand Institute and Senior Vice President at Nielsen. "We found that, while this generation has many unique characteristics when it comes to their housing choices, they share many of the same intentions as young adults in previous decades. As Millennials' economic situations strengthen, their demand will be important drivers of the housing market."
"One important difference between Millennials and young adults in previous decades is the unique financial challenges of home ownership today, resulting from graduating into a weak job market with growing student loan debt," said Jeremy Burbank, Vice President at The Demand Institute and Nielsen. "Many Millennials are open to alternative approaches to housing finance, including single-family rentals and rent/own hybrid contracts such as lease-to-own."
The report can be downloaded at The Demand Institute's website: www.demandinstitute.org