Millennials do not want to live in the same white picket-fence house for 40 years – it’s fair to say this is something that has been safely established. But a few recent reports and the latest ValueInsured Modern Homebuyer Survey provided new insights that shed more lights on this next-generation cohorts, their priorities, and how that may affect their plans to become homeowners.
According to a latest national study on Millennials conducted by Mayflower, 41% of all Millennials in our country are currently what the study calls “vacation movers,” or movers who do not plan to stay in their new hometown permanently. In fact, the study found 74% of Millennials who have relocated recently did so with a timeline in mind to move again. 53% of Millennials surveyed said they would like to make a move to a new city they don’t plan to stay in permanently in the next five year.
In another recent study by Bank of America, researchers found that even after Millennials settle down and buy a home, most do not see it as their forever home and plan to move again. Instead, 68% of the Millennials surveyed considered their current home a “stepping stone” home. This mentality was discussed last August in ValueInsured’s trend report titled "Not yet in their forever home, Millennial homeowners are ripe for upgrading".
Since this August release, ValueInsured has updated their findings quarterly and below are highlights on their latest results, from a nationwide study conducted during April 1-7, 2017. The findings again confirm Millennials’ nomadic tendency, with a staggering 88% citing plans to move to another home in 5 years or less. In fact, almost 7 in 10 Millennials surveyed (69%) plan to live in their current home for a total of under 3 years:
- 30% of all Millennials surveyed plan to live in their current homes for a total of under 1 year
- 39% plan to live in their current home for 1-3 years
- 19% plan to live in their current home for 3-5 years
- 6% plan to live in their current home for 5-7 years
- 6% plan to live in their current home for a total of 7 years or longer
The last two data points are noteworthy; as potential homebuyers, many Americans have heard of the “five-year rule” of home-buying, which experts have traditionally used to advise homebuyers. The rule is simple: homebuyers should make sure they plan to stay for at least 5 years before buying a home, in order to minimize their exposure to potential market fluctuation and risks of value loss.
Many Millennial non-homeowners want to own a home – in fact, 81% of them do, according to ValueInsured’s latest April findings. 76%, more than 3 in 4 Millennials, believe owning a home is an important part of their personal American Dream. However, when examining ValueInsured’s latest findings closely, 83% of Millennials also say it is their American Dream to be able to “pick up and move wherever I want, whenever I want”. Can the two ideals coexist? Increasingly, as the economy continues to improve, more Millennials who were shut out from homeownership before can now afford to buy, but they still want to retain their flexibility to pursue opportunities in this mobile new world. Isn’t it finally time to throw out the “five-year rule” and rewrite a new rule for this new generation?