In housing: Millennials ‘for the win’
Expert details generational demographics at Oklahoma Housing Summit & Expo
Millennials in Oklahoma City are more likely to be homebuyers than most, which puts builders in position to tap the demographic as it starts to dominate homeownership over the next decade.
That’s according to Merideth VanSant, entrepreneur, yoga instructor, business owner, specialist in generational marketing — and an Oklahoman millennial, though now based in Washington, D.C.
All that, plus coming from a family in the lumber supply and building materials business — Oklahoma Home Centers in Guthrie — informed her presentation Thursday at the Oklahoma Building Summit & Expo: “Marketing to Different Generations.”
Millennial buyers literally are the future, said VanSant, whose resume includes co-founding True U, “empowering teens through yoga, true talk and mindfulness,” and founding 405 YOGA at 1004 N Hudson and in D.C.
Reports of their reluctance, or inability, to become homeowners are fading, she said.
VanSant said millennials, born 1981 and later, make up the largest generational segment of homebuyers, at 35 percent, and they’re
on the rise; Baby Boomers, born 1946-1964, are second, at 31 percent, but in decline; and Generation X, born 1965-1980, is third, at 27 percent, also on the rise but peaking.
She said statistics show the generations outlining the unfolding market, oldest to youngest: Boomers made up 16 percent of rent home purchases. Generation X accounted for 27 percent, and millennials made up 68 percent.
State’s millennial mix
“We’re really lucky in Oklahoma. We’ve got one of the highest mix of millennials buying homes,” she told builders and others at the summit, presented by the Oklahoma State Home Builders Association at Cox Convention Center.
Homeownership overall has remained soft since falling from a high of 69 percent in 2004, the peak of the housing boom and before the subprime mortgage crisis, credit freeze, housing crash and Great Recession 10 years ago.
Millennials seemed to be AWOL for several years. More recently, statistics show them venturing into homeownership, often, VanSant said, with downpayment money saved while living with their parents well into their 20s or longer.
Earlier this year, SmartAsset.com, using census data, reported the millennial homeownership rate in 2015 ranging from 5 percent in New Haven, Connecticut, to 60 percent in Elk Grove, California. In Oklahoma City, the rate was 30.5 percent, down from 33.2 percent in 2006 before the recession.
VanSant said statistics show improvement since 2015 as millennials have advanced into betterpaying jobs. In fact, census statistics indicated that it was millennials who edged the overall homeownership rate to 63.7 percent in the second quarter of this year, up from 62.9 percent the year before, the lowest rate on record.
Here, local factors are having their own effect, said VanSant, who has a master’s degree in human development from Oklahoma State University.
“It might be hard to believe that sometimes when you’re looking at reports and you’re looking at potential customers, but Oklahoma ranks as having one of the highest groups of millennials that are either ready to buy homes or the projection is that they’re ready to buy homes in the next five years,” she said. “This is because programs like MAPS have made it kind of a better quality of life downtown — and in the suburban areas.”
In addition, she said, “The cost of living is better here, and there’s jobs available here. Builders in Oklahoma may have an advantage to working with millennials than, let’s say, a group from Washington, D.C., or the Bay Area.”
Looking ahead for homebuilding in general, “It’s really Gen Y (millennials) for the win,” VanSant said. “Although Gen X makes the most money, and Baby Boomers have the highest disposable income, Gen Y has the largest share of first-time buyers. And most of them are starting to find higherpaying jobs.
“We weren’t able to say this last year, but it’s nice to start to see the research emerging that those Gen Ys who had really lowpaying jobs out of college are starting to make enough money to afford a down payment on their first home, which pipelines into more homebuying in the future.”