Decades ago, it was pretty much a given that young couples would purchase homes and start their families there. Today, younger generations are shifting away from this norm, and not all of them see homeownership as a status symbol and success marker.
U.S. Census data estimates that just one-third of people under 35 currently own a home. Many of that remaining two-thirds continue renting for either financial reasons or personal preference.
To help real estate agents adjust to these shifting norms, we asked the members of Forbes Real Estate Council how to deal with this shift away from millennial homeownership. Here’s what they had to say.
1. Move Away From Traditional Homeownership Benefits
The shift away from homeownership may be due to affordability, lifestyle (e.g. marital status) and student debt. Traditionally, owning a home was the logical next step after marriage. People today are getting married later and focusing more on establishing their careers first. Focus more on the values that make sense for today’s generation instead of on the traditional benefits of homeownership. – Michelle Risi, Royal LePage Connect Realty
2. Understand Their Lifestyle Concerns
From my experience, it is important to open the conversation and understand the lifestyle concerns of the younger generation. Many times, these buyers are financially qualified or have their parent’s involvement. It is more that they do not want to feel “tied down” to one particular property or area. Explaining the residual income benefit of an Airbnb, duplex or other investment has worked for me. – Steven Caporale, Accel Realty Partners
3. Create A Positive Rental Experience
Homeownership today is simply not an option for many younger people because of student loan debt and a shift in priorities. To accommodate this shift, real estate agents should focus their efforts on the rental market. Today’s renters are tomorrow’s buyers. Winning renters over with a memorable positive experience is one way to grow an agent’s future business. – Zachary Maurais, Sunroom
4. Provide A Solution
Most agents fail their clients because they want to force them into a box. No one lays in bed, rolls over to their spouse and says, “Hey, we really need to find a good realtor!” They say, “This apartment is getting too small,” or “We need to move before this baby comes.” Success in any business comes from building relationships and being a solution provider. – Matt Motil, The Marie Paul Companies
5. Consider Commercial Real Estate Brokerage
Today, lots of people are renting, yet someone needs to own the rental. Becoming a commercial real estate (CRE) broker will allow you to work with clients who want to purchase a rental home (preferably a multi-family, free-standing or multi-structure property) and rent it out to younger generations. Condos aren’t the best vehicle for a potentially mobile landlord. – Kristin Geenty, The Geenty Group, Realtors
6. Show The Value Of The Investment
The younger generation has watched their parents learn an uncomfortable lesson. There is no guarantee that a home will go up in value over time. That makes it hard to convince the younger generation that a home is a good investment. Agents should shift their attention to explaining how homeownership can fit a younger person’s lifestyle. – Mark Tiefel, Capital Equity Group, Inc.
7. Educate, Empower And Serve As A Resource
Sometimes considered a member of this younger generation myself, I have realized that many people are simply not educated about the benefits of homeownership. They do not think about how they can build equity/net worth, tax benefits or even the cost of renting vs. owning. As opposed to trying to sell them an idea, I simply educate them about what I know which empowers them to make an educated decision. – Catherine Kuo, Elite Homes | Christie’s International Real Estate
8. Sell Them On ‘House Hacking’
Instead of viewing homeownership as a result of success, the younger generation needs to reframe ownership as a path that leads to success. With current high prices, encourage younger buyers to “house hack.” They get a duplex, triplex or large house with extra rooms, live in one and rent out the others to cover your expenses and set an investment habit for future snowball growth. – Jason Hsiao, Shaw Investments
9. Show Them It’s Within Their Reach
In my experience, many young people would love to own a home, but they feel like it is simply out of reach. They prioritize student loan debt and other responsibilities over buying a home. Many simply lack two things: a real understanding of homeownership and its many benefits and guidance on how to reach that goal. They need information and a little guidance! – Tony Acosta, Real Team Realty
10. Explore Alternative Property Sales Markets
The savvy real estate agent will handle the shift by broadening their skills in their real estate career. Baby boomers’ homes may not appeal to the younger generation, so looking at alternative sales methods such as residential living homes or becoming more familiar with the short-term/vacation rental market is another way an agent can adjust their methods to accommodate this shift. – Nancy Wallace- Laabs, KBN Homes, LLC
11. Prioritize Your Client’s Unique Needs
Always prioritize the unique needs of your client. Be diligent in understanding the client’s needs and providing options based on what they’re looking for. If they want to be a homeowner, they shouldn’t have to trade quality for affordability. If they prefer to rent, it’s the agent’s job to ensure their new home feels just as rewarding. – Cody Vichinsky, Bespoke Real Estate
12. Develop Relationships With Real Estate Investors
There has never been a better time to be a landlord because at the end of the day, someone has to actually own the property. As more people rent, there will simply be more investors that want to buy. Agents can adjust their sales strategy by getting to know investors and what they are looking for and then focus on finding listings that meet the needs of those buyers. – Holly Williams, Keepmore.com
13. Have The Facts On Wealth-Building
While the next generations of homeowners may not embrace homeownership in the same way as their parents, data can help them rethink the perceived value. Real estate pros need to have the latest facts on how owning real estate remains the single biggest builder of wealth. Unlike stocks or bitcoin, you can live in house. No one ever got rich renting, so share the data and turn the tide. – Kevin Hawkins, WAV Group, Inc.
14. Find Ways To Work With Renters
Millennials’ shift away from homeownership is a systemic issue that we’re going to be seeing more of. Millennials change jobs more often than any other generation, so agents need to look towards ways to work with renters instead of working directly from a sales standpoint. By accommodating more rentals, they’ll make more from a commission standpoint on volume than they would’ve on a single sale. – Ari Rastegar, Rastegar Property Company
15. Speak To Their Financial And Physical Goals
Agents can adjust their methods by learning how to speak the language that appeals to the dreams and values of the new generation. Newer generations want ownership of their lives and need to hear how homeownership can lead them towards their financial and physical goals. Educate and engage with them to help with the shift. – Collin McDowell, Greg Garrett Realty.com