Why you should care
Because wherever millennials move, prosperity is likely to follow.
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Growing student debt, memories of the Great Recession, a limited housing supply — all factors that have historically made millennials want to steer clear of homeownership…until now.
According to the National Association of Realtors, this generational group (defined as anyone born between 1981 and 1996) has made up the largest share of homebuyers over the past two years. But they’re not simply buying homes and growing the real estate market — millennials are shaking up entire economies wherever they settle.
To start, a big reason as to why this generation is now buying has to do with the increasing cost of renting. According to a 2017 report from Zillow, renting is actually more expensive than buying in most major U.S. metro areas, so purchasing a home is often the more affordable choice. Plus, with a variety of nontraditional lending options, buying a home is becoming more accessible for younger, first-time buyers.
So what does all of this millennial homebuying mean? Simply put: city growth and investment. Because wherever this young generation takes root, business developments and profits soar. Take, for example, a southern hot spot like Nashville.
Nashville is seeing a huge resurgence in real estate and business development thanks in part to the growing number of young folks who now call this place home. In fact, according to the 2017 U.S. Census Bureau, Nashville’s growth among the millennial population has been about 11 percent over the last five years, while the national average was about 2 percent over the same time span.
Millennials are really doing their homework in preparation for buying a home in the near future.
Mical Jeanlys, general manager at Chase
Jacob Kupin, a realtor with Truly Live Nashville and Village Real Estate, has seen this first hand. He saw a particular surge in millennial real estate when mortgage rates dropped in early 2018. “If the numbers line up with [your budget], it makes sense to look for a place,” he says.
In fact, the 2017 Chase Slate Credit Outlook Survey reported that millennials are taking their role as next gen homebuyers seriously. “Millennials are really doing their homework in preparation for buying a home in the near future. That includes monitoring their credit, which is key when purchasing a home,” says Mical Jeanlys, General Manager at Chase.
With the increasing number of young folks buying homes in Nashville, residents have observed a corresponding boom in the city’s development. City reports show that Nashville has almost 200 development projects currently underway, spanning from housing to retail to infrastructure.
And these city enhancements are exactly what millennials are looking for. According to a 2018 report by TH Real Estate, more than 55 percent of millennials look for convenience and short commutes in a city. Amenities such as walkable retail, dining, and entertainment options, as well as close proximity to a train station, are also seen as highly important.
Julia Pistell, a 35 year old writer and business owner, can relate. She bought an apartment in Hartford, Connecticut with her husband back in 2012. Though the New Jersey native spent her immediate post-college years in New York City, a smaller city with more affordable housing called her name. “We are very committed to staying in a city,” Pistell says. “Not so big that it’s unaffordable, but still a location where everything we want to do is within walking distance.”
It’s clear that millennials are leaning into the American dream and buying up more and more homes. And considering that the number of millennials is expected to surpass the number of baby boomers in 2019, this makes them a coveted generation for cities looking to bolster their infrastructure and development.
As millennials set out across the country, investors are not far behind. Because whither goes the millennials, development opportunities are sure to follow. That, and nitro brew coffee.