What to Know about Millennial & Gen Z Homeowners

A recent report from the National Association of Realtors entitle "The Home Buyers and Sellers Generational Report" shows the Gen Z/Millennial age groups are the largest group of potential homebuyers in America.

Currently, buyers aged 34 to 43 years (older millennials) make up the largest share of home buyers at 38%. Gen Z's add a further 3%.  Soon, they'll comprise the majority of homeowners as baby boomers sell their homes and move deeper into retirement. 

The Realtor NAR report shows baby boomers remain the top group of home sellers.

With Millennials (now aged 25 to 43) forming their own families and buying new homes and resale homes, they are the future of HOAs and community associations. In ten years, the numbers will be different as the oldest baby boomers move to nursing homes or unfortunately pass away.

2/3rds of Millennial buyers are male and they will be very influential in the decisions and management of homeowner associations.

2024 Home Buyers and Sellers Generational Trends

The 2024 Home Buyers and Sellers Generational Trends Report, which examines the similarities and differences among recent home buyers and sellers across generations, found that the combined share of millennials, both younger (ages 25 to 33) and older (ages 34 to 43), now make up a combined 38% of the home buying market, a substantial increase from 28% last year. Baby boomers, comprising both younger boomers (ages 59 to 68) and older boomers (ages 69 to 77), saw their share decrease from 39% to 31%, relinquishing their position as last year's largest demographic of home buyers.-- Nar.Realtor.

In your HOA, you may already be seeing baby boomers selling their homes to Millennials, or even Gen Z's.  The biggest issue holding back this tsunami of these younger buyers is high mortgage rates.

Those persistent high rates are locking in baby boomers and Gen X sellers, and preventing Millennials and Gen Z's from purchasing.

When mortgage rates decline, your resident profile will become younger and they'll be seeking services, solutions, and amenities that fit their point of view.

They will be influential in how your HOA board and management are conducted. They'll want to run boards differently and will prioritize services for residents differently. 

Spending time to understand their preferences and expectations is wise.  

Millennial Homebuyers Might be Different

Two characteristics may define this age group best -- (1) bank of mom and dad loans and (2) big debt loads. Some moved back in with parents to save money for their future home purchase. So there's a diversity of financial status with many of them moving into your communities.

A good portion of Millennials and Gen Z's face very high home prices and high financing costs that will make them house poor.  Faced with high HOA fees, they might seek to become active to try to reduce their HOA fees or encourage the HOA board to build amenities. 

Under financial pressure, they'll be looking for expenses that can be cut. Many will have limited funds available to contend with emergencies, assessments, and property expenses. They'll be very afraid of sudden assessments as they are in Florida.

How Will Millennials Be Different?

Being younger, they may push for more liberal HOA rules, more automated and online services, less enforcement, as well as lower fines for infractions such as parking on streets and property/house alterations.  Many will be commuting to the city to work, thus most will have 2 vehicles. Some may want to rent a basement to a relative or to provide extra income.

One survey conducted by Cinc Systems, revealed that Millennials may approve of HOAs and to buy a home in an HOA-governed community. However, the survey revealed they are more into "community" rather than governance. They find HOA's too restrictive which hints at potential conflicts with boards.  Your compliance officer will likely issue plenty of tickets.

They are interested in HOA software technology, and see their HOAs current software "poor and clunky."

The survey found they want community portals, mobile payment app, online document management, and online voting.  Digital management tools are desirable to this age group.

45% of respondents show some interest in joining an HOA board, however time constraints and feeling under pressure are the stopping points.

The gist of that study was that Millennials may be a threat to kill off their HOAs unless the HOA presents itself as an asset to them at an appropriate cost.

A Recap on Millennials in Your HOA

Millennials are people just as previous generations were. They arrive motivated by the safety, pleasantness, and beautiful environments you have created. Yet, they may have their own ideas about improvement and lifestyle.  Just like the baby boomer generation, their big numbers means they're going to impacting your HOA at some point soon. 

Many in their 40's now will have considerable financial power to influence and the resources to seek board positions and thus make changes.

As we mentioned, they're viewing the long life road ahead of them, and want good outcomes for their families. They're tech savvy and expect great HOA management software accessible via their trusted devices.

They expect efficient, transparent, and value producing results when paying their HOA fees.  Avoiding fee rises and massive assessments is likely on their minds. For some, i.e., those in South Carolina, California, Florida, Texas, and North Carolina, insurance is a trending issue.

Seeing the Opportunity of Millennials/Gen Z's

HOA boards will need to reevaluate how they plan and operate their association against what Millennials and Gen Z's expect and want.  This group can be a force to create the resources, energize boards, and help HOAs run optimally.

Consider adopting a powerful association management platform and keep your HOA in a state of constant bliss!  Find out more on selecting quality HOA software and how to optimize your HOA.

Contact our team now to discuss how to get started with ManageCasa's HOA software.