Millennials are the largest group of home sellers, yet they’re facing the greatest hurdles in the housing market. That’s according to a new report on the state of housing in America from the Zillow Group, Consumer Housing Trends Report 2018.
Millennials, people between the ages of 24 and 38, are more likely to be experiencing major life events — getting married, having kids, advancing their careers — than older generations, the report found. The majority of millennial sellers — 69% — said they have a hard time juggling life’s demands along with the stress and expense that goes along with putting a house on the market, such as choosing a listing agent, making repairs and home improvements, and negotiating with buyers.
Let’s make a deal
Despite being so stressed by the process, millennials are quickest to sell. The study found that young homeowners put their homes on the market three months earlier than older sellers. Yet they’re more likely to see an offer fall through or have to make concessions, such as lowering the price or even paying part of the closing costs. Fifty-eight percent have deals go south, and 89% make concessions, compared to 41% and 83% of all sellers.
As a result, the report found that a whopping 86% of millennial sellers wish they could have a do-over, with 29% saying they’d have priced their homes differently.
What about the buyers?
Millennial buyers are also facing challenges. Nearly a third of young homebuyers (including Gen Z-ers, who are 18 to 23 years old) said they had to look at smaller homes in areas that require a longer-than-desired commutes. Some 37% reported a shortage of affordable homes in their areas. “Most millennials, a large share of them, are looking out and trying to find that suburban single family home, you know. Whether or not they find it, or can afford it, is a different story. They generally have to make a concession on the site of that home,” said Skylar Olsen, Zillow’s senior economist.
And then there are financial constraints. Sixty percent of millennials can only put down less than 20%. “In order to make that down payment, millennials need to accept gifts or loans from family and friends – more so than previous generations and on top of that, the share of the down payment that is gift, is larger than it was before,” said Olsen.
Early signs of a buyer’s market?
No, it’s still a sellers’ market. “There’s a slow down … but it’s going from really hot to hot,” said Olsen.
Zillow’s chief economist Svenja Gudell doesn’t expect that to change anytime soon. “We don’t expect market conditions to shift decidedly in favor of buyers until 2020 or later. But buyers certainly are starting to balk at the rapid rise in prices and home values are starting to grow at a less frenetic pace,” she said.
Sibile Marcellus is an on-air reporter covering the day’s top stories in business for Yahoo Finance’s three daily live shows. Follow her on Twitter @chasingsibile
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