Millennials are the largest and most diverse generation that the world has ever seen. Born between the years of 1982 and 2004, in the early years of the, “The Information Technology Revolution,” millennials are a highly connected, adaptable audience.
One of the keys to building an effective millennial marketing campaign is to understand what drives the millennial generation – particularly where they live and why they live there and whether they prefer to rent or to own a home. This will allow brand marketers to gain more insight into how much expendable income millennials have on a month-to month-basis. Additionally, where a person lives says a significant amount about their personality and needs. A 33-year-old living in the sub-burbs is likely to have a very different lifestyle than a 33-year-old living in the heart of an urban city like Chicago or New York.
Based on analysis from Trulia’s economic team, millennials typically flock to locations where there is strong job and wage growth, in addition to affordable housing. Those metropolitan areas run the gamut from warm, landlocked, desert-like metros, to quaint, seaside cities, to cooler mountainside suburbs. Surprisingly, some of the hottest real estate markets for millennials are Austin and San Antonio, Texas, Charleston, South Carolina, and Colorado Springs, Colorado. Each area offers something different for potential homebuyers and renters.
In Austin and San Antonio, there are more health and technology jobs than qualified people to fill them. San Antonio’s affordable real estate prices, (the current average listing price is $266,224) aid in making the “Alamo City” a popular destination for homebuyers of all ages. Charleston is experiencing large growth in the technology sector, creating more and more jobs every year. The city’s many restaurants, breweries and good schools, make it a popular destination for millennials with families. Colorado Springs’ aerospace and defense industries attract young people from all over the country. Not only are there plenty of job prospects, Colorado Springs is a mecca for outdoor enthusiasts. A home for sale in Colorado Springs boasts easy access to many hiking trials and ski resorts, a strong draw for many young people.
According to Trulia economists, the number of people renting across the United States has risen from 31.6 percent to 41.1 percent in the years since the peak of the housing bubble in 2006. Older millennials, those that fall into the 26-34 year old age group, traditionally were the prime candidates for first-time homeownership. However, since the fall of the economy, that same age group has been unable to make the leap from renting to buying even though buying a home is currently 23 percent cheaper than renting.
So, why the hesitation?
One of the biggest issues facing the potential millennial homebuyer is the ability to save enough to afford the price of a down payment. Fifty-four percent of renters surveyed in 2015, said that saving enough for a down payment was their biggest consideration when making the transition to owning. This was followed closely by poor credit histories and meeting the qualifications for a mortgage. When asked what would encourage them to begin aggressively saving for a down payment, fifty-one percent of millennial homeowners said that a new job or promotion, and improved credit would aid in their willingness to purchase a home.
When creating your millennial marketing strategy, it’s important to take into consideration the financial pressures on your consumers. With so much of the average young American income being spent on living expenses, rent and mortgage payments, understanding the current patterns of the housing market is crucial to any company looking to advertise to a young audience.