Millennials’ entrance into home ownership has been delayed due to the recession, high unemployment, and high student loan debt. They’ve been living in their parents’ homes, as well as delaying marriage and having children, surveys show. But the pent-up demand from this generation is starting to surface, says Fred Ehle, vice president for PulteGroup.

Homebuilders, like PulteGroup and Better Homes and Gardens Real Estate, recently revealed surveys of what Millennials want in their future homes. In general, the surveys reveal that this generation isn’t wowed by luxury and prefers technology and flexible space.

Pulte Homes found in its research that more than half of Millennials who decided to buy a home last year from the homebuilder said their main reason was to invest and build equity.

As for what they’re looking for in a home, they appreciate an efficient use of space, an open layout for entertaining, ample storage space, and outdoor space that extends their living areas, according to the Pulte survey of 531 adult renters between the ages of 18 and 34.

“What may be different about this buyer is that they may have more stuff,” says Fred Ehle, vice president for PulteGroup. “It’s different kind of stuff: technological gadgets, gaming. They also do work from home.”

The Better Homes and Gardens survey of 1,000 adults ages 18 to 35 found that Millennials don’t like traditional floor plans and prefer unique spaces. They like to do home improvements themselves and are “fix-it” types.

One in five said that “home office” is a better suited name for their dining room, according to the Better Homes and Gardens survey. What’s more, 43 percent said they want to transform their living room into a home theater.

The survey also showed they’d rather have extra space in their kitchen for a TV than a second oven. Nearly two-thirds of those surveyed say they wouldn’t purchase a home without up-to-date tech capabilities.

Source: “GenY is finally in a mood to buy (houses),” USA Today

Part III – Rents Are Skyrocketing

Whether you own or rent, you will have a monthly housing expense. The question is how that expense will change in the future. When you purchase a home, for the most part, you lock-in that monthly housing expense for the length of the mortgage you take (15 or 30 years for example). When you rent a home, your housing expense is impacted by movements in the supply and demand for rental properties.

Historically, residential rental rates increase by 3.2% on an annual basis. However, in the current housing environment, there is an increasing demand for residential rental properties. This increase in demand has dramatically impacted rates. Zillow, in their most recent report, revealed that rental rates in the U.S. increased by 4.5% over the last twelve months. Other studies have projected rental rate increases of 4-5% over the next few years.

The only way to have control of your housing expense is to buy.

But Isn’t Buying Much More Expensive Than Renting?

Not right now! As a matter of fact, with prices down and mortgage rates at historic lows, it is LESS EXPENSIVE to buy than rent in most areas. In a recent report, Truliarevealed it is cheaper to buy than rent in ALL of America’s largest regions.

According to Jed Kolko, Trulia’s Chief Economist:

“People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat. Buying remains cheaper than renting in all 100 large metros. Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets.”

However, Kolko went on to say that this opportunity may soon disappear:

“Although buying a home is still cheaper than renting, the gap is closing. In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. By next year, buying could be more expensive than renting in some housing markets, even for people with the best credit.”

Again, the only way to lock-in your monthly housing expense is to take that decision out of the hands of a landlord by owning. With both prices and interest rates set to increase, the best time to buy is right now.

by THE KCM CREW