Key Takeaways
Millennials represent the largest share of recent homebuyers (36%), and recent homebuyers are much more likely than the general population to report that they’ve started a new job or had a child in the last year. These major life upheavals spur consumers to make a home purchase now, rather than waiting for interest rates to drop.
The psychographic profile of recent homebuyers is status-driven, reflecting a desire to impress others. Announcing a home purchase is certainly one way to garner that attention.
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To be chronically online is to know that everyone loves to complain about (everything) home ownership being out of reach for many Americans. Depending on who you ask, the story goes that young people can’t afford homes because we bought too many lattes or avocados, or that baby boomers refuse to give up their mansions and private equity is buying up too much real estate. And yet, millennials represent the largest share of homebuyers.
Mortgage rates are the highest they’ve been in most young consumers' lives. While we’re starting to see a decline, their frame of reference for interest rates still means today’s borrowing costs seem excessive. Making the leap into home ownership requires not only the funds for a down payment, but the desire to make one of the biggest financial decisions of their lives in what many perceive to be a suboptimal economic environment. Morning Consult Intelligence data reveals the triggers pushing potential homebuyers into home ownership are starting a new job or family expansion.
Homebuyers tend to be young, educated high earners
More than one-third (36%) of millennials said they’ve purchased a house or condo in the last year. Older consumers on the other hand already own their homes, likely owned outright or mortgaged at much more favorable interest rates than what’s available today, which disincentivizes them to sell their properties.
Young adults with high incomes are most likely to be homebuyers
Income plays a role here too. Wealthier households are, of course, more likely to have the funds for a down payment and ability to get approved for a mortgage. That higher income also contributes to a rosier view of economic conditions: They’re more likely to say they’ll be better off financially this time next year (43%, versus 35% of the general population), and that now is a good time to buy major household items (33% versus 18%).
Starting new jobs and having kids drives home purchases
Even with the financial flexibility afforded by a higher income, buying a house right now when interest rates are expected to drop might not be a strictly financially sound decision — though lenders can dangle the promise of a refinance opportunity to help move a sale forward. Life stage shifts more common for young adults are the x factor for home purchasing: Recent homebuyers are much more likely than the general public to say they’ve started a new job or had a child in the last year. Buying a new car to support a new commute or accommodate a car seat goes along with the major purchases for this cohort.
Homebuyers are starting new jobs, having kids and buying cars all at once
Starting a new job doesn’t necessarily mean moving closer to the office for a shorter commute. Homebuyers are also more likely than the general population to work from home, so the need for space for a home office (or conversion of a home office to a nursery) can also drive the need to buy more living space.
Homebuyers are social strivers
The psychographic profile of recent homebuyers reveals a desire for outward signifiers of status. They’re the first to try a new tech product (hello smart home features), seek out the popular crowd and aim to get ahead in life. This profile is extraordinarily similar to the luxury consumer profile described in our recent report, A Data Deep Dive Into Luxury Consumers. These upwardly mobile young adults are also trend conscious, so will seek to put their own stamp on homes they buy. They’re a prime target for renovation and decor content and will seek out trendy furnishings and the latest tech for their home appliances.
Homebuyers show interest in social status and consumer trends
There’s also an indicator of a life of privilege in this profile: Homebuyers are less likely than others to say that they tend toward the less expensive option, that they think everyone has the right to be treated equally and fairly, and that they would rather do things themselves than rely on others. Maybe part of that reliance is getting help with a down payment from their parents.
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This memo has been edited for clarity.
