Millennials are now the largest living generation. Enough have hit adulthood as the Baby Boomer generation has lost enough members that Millennials are now the largest group.
That means that they are also the biggest consumer market, especially for first-time home purchases. Home builders are starting to recognize that there needs to be more small, first-time homes on the market.
Of course, since about the 1970s, there has been a trend to build big houses with the McMansion craze becoming ubiquitous in the 2000's where it seemed that every home sold was a monstrous space with over 3,000 square feet. The problem is that those homes are rarely within reach of the first-time home buyer.
Recently, when mortgage rates rose to over 5%, the housing market ground to a near halt. Now that those rates are backs in the 3's and 4's, there are homebuyers on the market.
"Normally the first-time homebuyer group leads the pack in a housing recovery, and the move-up group fills in later," said Jeff Mezger, CEO of KB Home told Forbes Magazine. "This time around, it was flipped; the millennials delayed buying for a decade, and the industry was fed by the move-up segment. Now, we're finally starting to see a normal housing recovery."
The article goes on to point out that 55% of new homes sales delivered by KB Homes were to first-time home buyers.
Millennials have delayed purchases of a new home for marriage, their career to settle down, and more. This generation and the next younger one, Generation Z, are very gun shy after watching the mess that was created with the housing bubble burst in 2008. They don't see homes as the best and only important investment, as their parents and their grandparents did.
What does this mean for first-time home buyers?
It means that first-time home buyers can look forward to having homes built that will meet their specific needs - smaller and less expensive. That's a change where most first-time homes have been small, older homes built before and shortly after World War II.
What does this mean for sellers?
If your home is smaller, it's probably going to sell faster than larger homes. Work with your real estate agent to stage the house well and get it ready for Millennials shoppers who might love things like wifi and smart locks.