There's an interesting shift afoot in the Millennial homebuying market. While this step may not be right for everyone, Mynd’s 2022 Consumer Insights Report shows that some Millennial and Gen Z buyers are using homeownership to build prosperity in a less traditional fashion. According to the report, younger Americans are taking a different path toward homeownership than previous generations.
The report went on to say: “A growing number of Americans are choosing to make their first real estate purchase as an investment property.”
Rather than buying a dream home and moving into it, some younger buyers are instead purchasing a house that can be used as a rental property. “Almost half of Millennials and Gen Z (43 percent) are considering buying an investment property compared to only 9 percent of Baby Boomers and 27 percent of Gen X,” the report found.
Why start with an investment property? A homebuyer might do this if they feel they’re unable to afford a house where they currently live—typically, in an in-demand neighborhood or city with higher housing prices. Instead of putting homeownership on hold and continuing to pay rent, they might buy a house in a lower-cost area and use it as a rental.
Though this option isn’t for everyone: For some buyers, it’s a win-win. A homebuyer can continue to reside in their city of choice, while owning a home that accrues equity and generates rental income.
For other buyers who aren’t ready to become landlords, homeownership is still a top priority. Among those polled, the Mynd report found that most people continue to value homeownership as an important life achievement. Much of this has to do with homeownership’s ability to Build Prosperity, with the potential to provide financial stability in the years to come and an inheritance for the next generation.
“Nearly two-thirds of Americans (65 percent) see homeownership as a means of building intergenerational wealth,” the report noted.