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Many have been skeptical that Millennials are interested in homebuying, but various reports show Millennials’ growing interest in real estate investment.
A RealtyShares report on Americans’ investment preferences indicates that 55 percent of Millennials are interested in real estate. This interest is mirrored in research from Fannie Mae that states 85 percent of Millennials see real estate as a good investment.
A recent Forbes article shows they are driving the trend of real estate investment and investing less in the stock market. A little over half of Americans were investing in the stock market last year, a decrease from almost two-thirds in 2007.
In the report, Millennials were asked to choose the “best-performing investment since 2000.” While 40 percent reported uncertainty, 25 percent chose the stock market, and 20 percent of Millennials believed real estate performed the best since 2000.
Which investment actually performed the best? Well, real estate did outperform the stock market between the years 2000 and 2016: the S&P 500 resulted in a 5.43 percent annual total return, while real estate yielded 10.71 percent. However, both the stock market and real estate recovered fairly well post-recession.
The stock market may have left a greater impression on Millennials’ minds than the housing bubble burst which caused it. This is because many Millennials were graduating college during the recession and faced the limited job market.
In addition, Millennials have witnessed the steady recovery of the housing market and are starting to purchase their first homes as they grow their careers and purchasing power. Half of first-time buyers are under 36 years old, and first-time buyers compose 47 percent of total property sales, as Zillow reports.
This visually-inclined generation is attracted to real estate as a tangible investment, compared to the intangible and often obscure stock market. This continual attraction will help the real estate industry thrive as more Millennials, currently the largest generation in America, look towards homeownership as their next investment.
Millennials will continue to be an influential force in the real estate industry, not only as future homebuyers but also as future employees and entrepreneurs in the housing ecosystem. NAWRB Magazine’s forthcoming issue will feature an article on how we can attract millennials into the industry.
The 2017 NAWRB Nexus Conference will feature similar discussions as we take a comprehensive look at “Women’s Collaboration for the Future,” and the role that Millennials will play at the forefront of gender equality and diversity in the housing ecosystem.