Millennials are Accelerating the Migration to Home Ownership While Contributing to a Thriving DIY Market
Millennials now account for the largest demographic cohort and share of home buyers in the United States. According to the latest Census data released in July 2019, millennials (numbering 72.1 million) officially surpassed Boomers (71.6 million) in population size. Millennials accounted for 38% and the largest share of home buyers in 2020 and will drive the market in 2021 as first-time home buyers and trade-up buyers, according to the NAR’s 2020 Home Buyers and Sellers Generational Trends Report. Younger millennials accounted for 88% of first-time home buyers and older millennials 52%, the highest shares of any age group. According to , 2021 will see the “rise of the millennials” both in the entry-level market and as “move-up” buyers as they have children.
Urban to Suburban
COVID-19 has triggered what PwC Research Institute has called the “Great American Exodus” from urban to suburban with millennials leading the charge. PwC cited New York City, which, in August 2020, saw total sale inventory reach the highest level since 2010. In its Emerging Trends in Real Estate 2021 report, PwC highlighted the 30-49 age group—projected to grow some 8.4 million in the coming decade—which will drive nearly 80% of household formation in suburban areas. This group will reportedly be seeking affordable and lower cost homes.
The NAHB confirms the suburban shift in home building, a trend borne out during the COVID-19 pandemic, which is showing no signs of slowing. Single-family construction continues to over perform in lower density, lower cost suburbs, exurbs, and rural communities, according to NAHB data. The NAHB first reported the movement in the Q2 2020 Home Building Geography Index (HBGI), which continued through the remainder of 2020.
COVID-19 has served as an accelerator in the home improvement market. “We’ve seen a significant spike in…share of wallet being spent on the home,” said MASCO CEO Keith Allman, in the company’s Q3 2020 earnings call. Allman speaks to MASCO’s research and discussions with channel partners, who point to structural changes in the DIY market. Allman said in MASCO’s Q2 2020 earnings call, “Now this is a thesis that we have been talking about for some time as it relates to the millennials coming into the market, forming households, and that big cohort being able to be a tailwind for our DIY business. And we do think that this will be a structural shift, and we are poised and ready to take advantage of that.”
“You simply can’t deny that the millennials have entered in and entered in big into DIY…We expected it, but it’s earlier. So that could represent a structural expanding of the DIY pie.”
– Keith Allman, CEO, MASCO
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