An army of consumer power, known as the Millennials, is headed our way and poised to rock our economy in an historic way.
Last week we talked about their size and strength. Now let’s talk about their ethnic blend and what they’ll demand from the housing market. This new “Boom” will look much different than the one in the 70’s – 2005. The country is becoming more of a “Rainbow” society. By 2024, according to the Mortgage Banking Association (MBA), the following will occur in household growth in the US.
Hispanics 5.7 Million
Non-Hispanic White 5.0 Million
Black 2.4 Million
Asian 1.9 Million
The ethnic blend will change three main characteristics from the “Boomers”.
- Size of home – words like simplify, efficient, economic replace, bigger, opulent & lavish. Millennials are satisfied with the smaller home footprint.
- Cost of home – while the affordability index is at the lowest levels since 1992, the mindset if conservative and flexible when it comes to the monthly obligation. The old question of “what do I qualify for?” has changed to, “I can afford X”.
- Location – proximity to shopping and transportation is much more important to this group. Long commutes no longer are a tradeoff for that home in the country.
We are poised to see a housing boom that will in all likelihood exceed what the market did during the “Baby Boomer” generation. What does this all point to? Have you heard the phrase “35 is the new 25”? That is true about the “Millennials”! So buckle up, the next ten years will be a decade to remember in the housing industry!