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Homeownership

Stereotypes be damned, millennials really want to own their own homes

As this demographic overcomes the obstacles in front of them, it appears they will have their eye on owning their own home. The age at which that happens may end up being a bit higher than usual.

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When people share their opinions on millennials, they tend to fixate on the distances between our values and actions and those of the previous generation. However, now we have a small piece of proof that we’re not so different when it comes to our residential aspirations.

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Numbers don’t lie

In the National Association of Realtors’ annual Housing Opportunities and Market Experience (HOME) Survey, we can see that, contrary to some belief, millennials still feel positively about owning a house.

96 percent of surveyors under age 34 would want to buy a home in the future.

Eventually they move out of mom and dad’s

That’s a big deal, because 35 percent of homebuyers are millennial, and the number will only increase over time. According to a MarketWatch report, the millennial population bulges around age 24 and 25, only a year or two before the age where many millennials begin to marry.

That means that the “arrested development” generation is poised to reach a time where they move out of their parent’s basement and into their own place. The data from the report shows that too. According to those surveyed, 40 percent of non-homeowners don’t plan to buy before they marry, begin to have a family, or change jobs.

Though it might take a bit longer..

As you might expect, the other 57 percent of millennials who haven’t bought yet can’t afford to buy. Rising rent costs and student loan debt stagnate savings, making it harder to cobble together a down payment. Housing price increases across the board, but especially in cities that are hotbeds for job growth, certainly don’t help the matter.

In spite of all this, millennials still feel great about owning a home. As this demographic overcomes the obstacles in front of them, it appears they will have their eye on owning their own home. The age at which that happens may end up being a bit higher than usual.

The American dream

You can see more of that positive attitude in the reasons why millennials want to own. According to the HOME survey, 85 percent believe buying a home is a good deal, and 88 percent believe that homeownership is part of their American dream.

That disparity is curious, no? It seems to indicate how much social and emotional weight people still put into houses. When you break this sentiment out by region, you see even greater disparities. In the South, 91 percent view homeownership as a part of their American dream, while only 85 percent say it is a good financial decision.

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Regional differences

It’s not surprising to see that in the Northeast, where real estate prices run high, only 84 percent of those surveyed thought owning a home is financially prudent. However, in the West, where home prices are currently skyrocketing, we see the highest percentage of millennials who see homeownership as a prudent financial decision. While the startup cost may be high, buyers can be almost certain of a return on investment. This attitude is bolstered by the cultural glamorization of the house-flipping business. Now, more than ever, millennials have reason to see a home as a piece of a retirement or investment strategy.

#MillennialHomebuyers

Born in Boston and raised in California, Connor arrived in Texas for college and was (lovingly) ensnared by southern hospitality and copious helpings of queso. As an SEO professional, he lives and breathes online marketing and its impact on businesses. His loves include disc-related sports, a pint of a top-notch craft beer, historical non-fiction novels, and Austin's live music scene.

Homeownership

These 10 US cities boast the most immigrant homeowners

(HOMEOWNERSHIP) It’s no coincidence that the most exciting areas of our country are also the most diverse.

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What do Miami, Los Angeles, New York, Las Vegas, and Washington D.C. all have in common? They’re all part of the top 10 cities with the highest number of immigrant homeowners. Other things they share include being hubs for culture, cuisine, and tourism, which is perhaps why they’ve become homes to the United States’ most diverse and thriving economies.

What does this show us? Immigrants are pursuing higher-level jobs in urban areas and laying roots. Consequently, these areas are flourishing in part due to increased competition in every industry.

But it’s not just those cities, here is the full top 10 list of cities with the highest number of foreign-born homeowners:

  1. San Jose, CA
  2. Miami, FL
  3. Los Angeles, CA
  4. San Francisco, CA
  5. New York, NY
  6. Riverside, CA
  7. Houston, TX
  8. Las Vegas, NV
  9. San Diego, CA
  10. Washington, DC

Highest immigrant homeowners in the US 2022

Why is this important?

Given that so many of us immigrated or are children of those who did (shout out to my great-grandparents and their courage), the result is clear. While some consider immigration to be invasive and detrimental to the American way of life, here is the truth: people of other cultures are here; through contributing to a wide variety of industries, they are finding success (enough to buy a home), and we’re better off because of it.

Cities with the lowest foreign-born homeownership (Pittsburgh, PA; Birmingham, AL; Cincinnati, OH; Louisville, KY; St. Louis, MO; Memphis, TN; Buffalo, NY; Indianapolis, IN; Kansas City, MO; Columbus, OH) reflect a different result. Cincinnati, Louisville, and St. Louis aren’t as strong economically as the booming economies in Texas and California.

Lowest immigrant homeowners in the US 2022

Why is this immigrant homeownership cause for celebration? In an over-simplified example, consider food. Think of the least diverse city you’ve visited. Now think of the dining options regularly available there. How many of them are mediocre, boring, or flat-out unimpressive? In a diverse and dynamic area, the dining options are LIMITLESS. The competition is fierce and as a result, restaurants, and vendors produce incredible work. No one in L.A. has ever said “There are no good places to eat.” Scale that up to every industry and the proof is in the pudding – immigrants are lifting up economies, and we are better for it.

To all the immigrants about whom this article is written — a tip of the cap. Keep living your dream.

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Homeownership

The phrase ‘starter home’ is overrated and overused

(HOMEOWNERSHIP) You see the term in the MLS for fixer uppers, you hear it when Realtors are working with first time buyers. But the term “starter home” shouldn’t be in anyone’s vocabulary. Here’s why.

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Just words

Collins English Dictionary defines a starter home as a “small, new house which is cheap enough for people who are buying their first home to afford.” You won’t find the phrase too often outside of the real estate industry.

There isn’t much about the etymology of the phrase, but most likely, it’s a marketing ploy to get people to buy into the idea of purchasing another home in a few years.

Grind your gears

Mark Greutman, husband to Lauren Greutman, believes that the term “starter home” should bother people. The phrase implies that you will upgrade later.

Your starter home isn’t good enough for the rest of your life. And not to get into how well Americans have it, what about people who will never be able to afford anything more? Is it an insult to them?

Do you really need two living rooms?

Older generations bought one home and lived in it until they could no longer be independent. In today’s world, we buy a starter home, then upgrade to have more space, to live farther away from our neighbors, to have rooms that are only used once or twice a year, and to make sure you have a 2 or 3 car garage to hold your vehicles and more stuff, some of which isn’t taken out very often.

But consider this: You could pay off your starter home in 15 to 20 years, if you budget right.

You could be out from under a mortgage and have money to travel, send the kids to college, or even retire early. When you think about what led to the financial crisis in 2008, isn’t it better to have a smaller house where you can make the payments than worry about losing your house?

Be content where you are

Realtors are motivated to make sure that they have customers. If people buy one home with the intent to stay, will the market dry up? Probably not, because people move and a new generation will be ready to purchase homes for their own family.

Let’s think about that phrase, “starter home.” It fuels consumerism and discontentment. Don’t call cheaper houses starter homes, but just a home.

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Homeownership

The remodeling projects with best ROI that actually increase home value

(HOMEOWNERSHIP) Knowing which remodeling projects to tackle when a home is being put on the market can save a lot of wasted effort and money.

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If you’re looking to help your clients to identify which projects to tackle before putting their home on the market, look no further: the National Association of Realtors surveyed thousands of real estate agents, industry professionals, and consumers on interior and exterior house remodeling projects, and these are the best projects for upping a home’s value before listing it on the market, ranked on the most value and cost recovery a homeowner can get.

  • Refinishing hardwood floors. Start from the bottom to earn top dollar. Refinishing floors transform a home from worn-out and aging to vibrant and inviting, and only costs about $2500 according to the National Association of the Remodeling Industry (NARI). The project also increases a home’s value by that same amount, meaning a homeowner can recover 100 percent of the costs. Pretty sweet deal.
  • Upgrading insulation. Because it’s what’s inside that counts. This project costs about $2100 based on NARI Remodeler’s estimate and increases a home’s value by $2000 according to Realtors surveyed. That’s a 95% cost recovery.
  • Adding new wood floors. If you don’t have wood floors to refinish, add them in! This costs about $5,500 according to NARI Remodelers, and the increased sales value is $5000. A homeowner can recover 91% of costs from a new wood floor addition.
  • Replacing HVAC system. A new HVAC system adds energy efficiency and refreshes the entire home, and NARI Remodelers estimate doing so costs $7000. The increased value for sellers is $5000 according to NAR REALTORS, meaning an easy breezy 71% cost recovery for homeowners.
  • Converting a basement into a living area. Not only is this cost and space-efficient, it’s also undeniably trendy. A basement makeover costs about $36,000 according to NARI Remodelers estimate and increases value for sellers by $25,000 according to Realtors surveyed. That comes out to a cost recovery of 69%.

Which projects are the most costly?

In case you’re curious, these are some of the most expensive remodeling projects:

  • New master suite. More like master $uite – this costs about $112,500 with a cost recovery of 53%. 
  • Converting an attic into a living area. Cute idea, but also a $65,000 one with a 61% cost recovery. One might say the price is through the roof.
  • Complete kitchen renovation. This project costs an estimated $60,000 with a 67% cost recovery. Even more if you want to throw in a brick oven, and you probably do.
  • New bathroom. With an estimated cost of $50,000 and a 52% cost recovery, make sure you aren’t flushing money down the drain with your bathroom addition!

These trends change over the years, so make sure your knowledge is up to date locally since we all know local trends trump national. Hopefully today you’ve garnered some ammo to help clients better understand how to improve their home’s value!

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