Gen Yers may appear to mature later and want gratification (and information) sooner than past generations, but that doesn't mean that their ultimate goals in life are much different from previous generations, according to “Generation Y: America’s New Housing Wave,” a research report released this week at the Urban Land Institute's Washington Real Estate Trends Conference.
Leanne Lachman, president of Lachman Associates and author of the report emphasized that the Gen Y cohort is very optimistic. "The financial crisis has been in their faces but it hasn't altered their outlook," she says.
That may be one of the reasons they think owning a home in the near future is attainable. Lachman says 90 percent of the Gen Yers polled in the survey envision becoming homeowners. That, of course, depends on employment, but in five years, she said 75 percent of Gen Yers said they plan to have full-time employment. Two thirds of Gen Yers expect to own a home by 2015.
"Most said their home purchase will come sooner rather than later," Lachman says.
Out of those people who expect to buy, only 9 percent envision purchasing a condo, while 5 percent expect to buy a duplex or townhome, and a whopping 82 percent expect to buy a single-family home. In fact, 35 percent of those surveyed already own a home, while 37 percent are renters. "It appears that Gen Y took full advantage of the first homebuyer tax credit," Lachman says.
Of the Gen Yers who rent, 60 percent are in apartments and 40 percent rent a single-family home or a room within an existing household. Lachman says 60 percent of expected renters expect to rent an apartment or condo, while 7 percent expect to rent a townhome or duplex, and 28 percent expect to rent a single-family home. "There is very strong multifamily demand, but there's also a strong overall housing demand," Lachman says.
Right now, the central/downtown neighborhoods in cities are drawing Gen Yers. Lachman says that more than half of Gen Yers live there currently, though she adds that the outlying suburbs will be as likely to draw them in the future. "Most singles are in the cities," she says. "Those who are married or with partners are in the suburbs."
Lachman said that 25 percent of respondents would relocate to find a job, but most expect to stay within the region where they're from. "They won't accelerate the pattern of moving to the South and West," she says.