Reason Why Millennials Are Not Buying Homes

Reason Why Millennials Are Not Buying Homes

      My name is Thomas Morimoto, I’m from the greater Twin Cities area, and I am a 25 year old licensed realtor in this wonderful state of Minnesota. Before partnering with my parents as a realtor, I was a full-time college student that bounced between different jobs just trying to pay off aprivate education and eat at night. The most frustrating thing about getting anew job is the training portion and how dumb or incompetent it makes you feel because no matter how easy the job can be, the first few days are overwhelming.But it gets much worse. There is a type of training that is called the “sink or swim” method, which has become very popular with some employers. In this type of training you learn by doing, but the problem is you don’t know what you aredoing! You may even ask yourself, “Where do I begin?” Now, you may wonder where I am going with this… I think hidden in this analogy is the answer to why millennials can feel a little nervous about the idea of buying a house. No one likes tofeel stupid!

        Being a millennial myself, I hear many different types of theories about why some millennials aren’t buying homes in today’s housing market. Some point to the marriage rate in America and how the meaning of marriage has lost its power. This has caused people to live separately a lot longer than they used to so they don’t feel ready to be a home owner until much later in life. Others may point to the inability to save up for a down paymentbecause the price of renting is at an all-time high. And we especially cannotforget the housing bubble pop in ’08 and how that still haunts potential buyers today. Don’t get me wrong, there is truth in these theories. But overall, Ithink there is something much simpler going on. Just like the “sink or swim method”, I think it is as simple as people feeling incompetent and not knowingwhere to begin.

        A few weekends ago my friend was getting married down in Iowa and a bunch of us made a trip out of it. While we were all hanging out, anoter friend told me that he and his wife were starting to look at homes. So I proceed to go into realtor mode and fire off some simple questions, mostly about time frames and locations. He told me that they are still about a year out, so I have some time to find them a “great deal”. As we continue our conversation, he brings up money which can some times be a dream killer so I needed to be careful. He said that he was going to buy a $250,000 home in a certain area. As an agent I was really impressed thinking that he went to a mortgage officer already so I asked who he got that quote from. Needless to say,it was just a guess based on his experience dealing with other loans such as student and car loans.

        I tell you that story not to make fun of my friend (I can do that on my own time), but to prove to you that somemillennials truly don’t know where to start. Since I became a real estate agent,I have met up with multiple couples to talk about the process of buying a homewell before they start looking. The first question I usually ask is, “What doyou know about the home buying process?” This allows me to get a sense of whereI should start, but they will usually stare at me awkwardly and finally just shake their head in confusion. It’s not just coincidence that these couples bought homes a couple months or even weeks after that initial conversation. Nor is ita coincidence that their friends started to buy homes shortly after that. I simply showed them how to begin the process of buying a home so that they felt confident in what they were doing.

        Every situation is different andevery household has their own opinion when it comes to buying a home so this isn’t a blanket answer for why all millennials aren’t buying homes. It truly just may not be as complex as you think. As a millennial myself and talking with others in my age group, I have figured out that most people don’t like the “sink or swim” method because feeling stupid is not fun. While writing this article, my wife questioned me and asked why people don’t just call a broker’s office to find out how to start the home-buying process. Here’s what I would tell you about that. Broker’s want clients. They want clients who are ready to buy. They often will avoid the questions initially and say whatever they have to say to get you into some kind of contract with one of their agents. So myadvice to anyone looking to start the home-buying process (millennial or not) who doesn’t know where to start, is to find someone you can trust to guide youthrough the process and not treat you like just another client.

Author:

Thomas Morimoto

Working with The Moto Team @ RE/MAX Results



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Dated: August 11th 2016
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