A September 2012 article in The Atlantic asked this question and raised the following issues: Nine out of 10 Millennials say they eventually want a place they own, according to a recent Fannie Mae survey. But this generation’s path to homeownership is fraught with obstacles: low pay, low savings, tighter lending standards from banks. Student debt—some $1 trillion in total—stalks many potential buyers as they seek a mortgage (or a car loan). At a minimum, homeownership rates are highly unlikely to soon return to the peaks they hit during the housing bubble. (To read the full article, click here.)
AIM has been asking some of the same questions and has found that Millennials are notcheap. They do not hesitate to invest in the latest smart phone or tablet technology. And yet, when it comes to major purchases such as cars and homes, the majority of Millennials have no plans to invest in the next several years. The reasons are more often than not, not financial. Instead, Millennials say they “do not really need it” or “do not really want anything extra to worry about.” It is a vastly different mindset from that of GenXers or Boomers at the same age. Still, in the next decade, a group of people the size of California’s population—most of them Millennials—will likely come together to form new households. Where will these new households be? And what will they look like? If Millennials are hesitant to invest in their own homes, will they be willing to invest in “stuff” for the home? Our clients have asked us to find out.
AIM is about to embark on major research to learn how marketers can motivate “cheap” Millennials to buy products for these new households. We’ll be reporting our findings at the March Housewares Show (see sidebar). If you have specific questions you would like to see answered in the research, pleaselet us know.