Everyone is trying to decode Millennials today and find out what makes them tick. At Lab42, we understand that purchasing behavior has always been a primary focus, but to better understand Millennials, we feel it is important to dig even deeper into the demographics and psychographics to uncover what drives their behaviors. For that reason, we continue to conduct ongoing studies targeted toward this generation on topics that are wide-reaching and impactful, and most recently, we conducted a study on housing preferences and behaviors.
Specifically, when it comes to Millennials and housing, we wanted to determine their current level of satisfaction, the motivation behind their decision to rent or own, and their intentions for the future.
What we found is that despite the most recent economic recession, Millennials are highly satisfied with their current living arrangements across the board – from home owners to renters to those living in a place for free (i.e. with parents or friends). According to our study, 95 percent of Millennial homeowners report being satisfied with their decision to buy a house, with 73 percent saying they are very satisfied. Though homeowners report the highest levels of satisfaction, 82 percent of renters reported similar satisfaction, along with 72 percent of those who do not pay rent.
Despite renters’ current satisfaction, 44 percent of renters plan to buy before 2018, while 25 percent plan to buy in 2018 or later. Younger Millennials, ages 18-24, are twice as likely to be among those planning to purchase in 2018 or later.
Overall, Millennials find their housing payments to be affordable, likely contributing to their level of satisfaction. Eighty-nine percent said they are either ‘very affordable’ or ‘affordable’, with homeowners slightly more likely (94%) than renters (84%) to find their payments affordable. A gender difference was also apparent, with men more likely than women to think their payments are affordable (93% vs. 84%).
The study also revealed differences in rationale behind Millennials’ decisions to rent or purchase a home. Among renters, the most popular reasons to rent were that it was more affordable (52%) and offers flexibility in where they can live (39%). Among Millennial homeowners, the number one reason for owning is that it lets them live in an area they want to live (42%), followed closely by it being more affordable (36%) and making more financial sense than renting (35%). A higher percentage of women than men cited “it makes more financial sense” as a top reason (42% vs. 26%), while more men said that the duration of their stay in the area was one of their top three reasons for owning (26% vs. 15%).
For even more on Millennials and housing, download the topline report here.
The Lab42 survey was fielded among 500 Millennials in the United States, ages 18-34, from March 28-31, 2014. Respondents identified their living arrangements, comprising the following breakdown: Owners (44%), Renters (39%), Live in a place I do not pay rent (14%), and Live in a residence hall or dormitory (3%).