A growing body of research is discrediting what was previously assumed about millennials’ taste for real estate. Many housing analysts said this generation of young adults preferred small, urban walk able corridors, but recent studies are revealing a different preference.
Millennials, just like previous generations, are showing a strong preference for single-family homes, according to a new Housing Insights report released by Fannie Mae’s Economic & Strategic Research Group.
Researchers examined the rates at which young households are occupying single-family homes today and also compared it to young adults’ preferences prior to the housing crash.
“The analysis reveals that the likelihood of a millennial household occupying a single-family home today is down somewhat from that of young adults at the peak of the housing boom, but is no different than it was for young households in 2000, prior to the boom,” writes Patrick Simmons, Fannie Mae’s director of Strategic Planning, Economic & Strategic Research. “Moreover, when structure-type occupancy rates are disaggregated by housing tenure (renting vs. owner occupancy), millennial home owners aged 25-34 today are found to be more likely to reside in a single-family home than their predecessors, and millennial renters are roughly as likely to occupy a single-family home as the preceding generation.”
What’s more, 90 percent of 25-34 year-olds who purchased a home recently chose a single-family residence. That surpasses the rate at which young adults bought single-family homes at the peak of the housing boom.
“Millennials’ desire for single-family homes is not only substantial, but should strengthen in coming years as more members of the cohort age into their thirties, prime years for first-time home ownership,” Simmons notes. “Given the massive size of the millennial generation, this life-cycle progression should support continued recovery in housing construction and bodes well for a stronger rebound in the single-family sector in the second half of the decade.”