Millennials, the US Housing Market, and Mobility
As millennials get older, establish their careers, and start families, mobility professionals are faced with a question: How do mobility programs need to be tailored to fit the needs and challenges of this growing workforce population? Millennial housing trends, in particular, will have a major impact on mobility packages and relocation. Our white paper, How Millennials are Impacting the U.S. Housing Market, takes a look at these trends, challenges millennials are facing, and what mobility professionals should keep in mind when developing programs for this specific population if they hope to attract and retain the best talent possible.
Many millennials are considering the financial benefits of buying a home versus renting. Often saddled with significant student debt, mortgage payments that are often lower than monthly rent in many locations can be particularly appealing. Millennials represented over 25% of the total number of homebuyers in 2018. As more millennials join the ranks of home ownership, this percentage will likely rise in the years to come.
The Challenging State of U.S. Real Estate
While this population is demonstrating a growing interest in home ownership, the U.S. real estate market can be challenging for millennials and the mobility professionals tasked with their relocation. Demand is high for small to moderately sized homes, but a low inventory and lack of appropriate home types and locations is prevalent. Many baby boomers are attempting to sell homes and downsize, leaving homes that are larger than millennials need or can afford. Additionally, the baby boomers who have sold their properties are now also competing with millennials for downsized properties. For millennials, city-fringe properties are in high demand, as they crave proximity to amenities. Often, there aren’t viable options that fit this bill for younger employees within this group.
Additional Challenges for Relocating Millennials:
Companies face additional challenges when relocating millennials, as many employees are part of dual-income households. In such cases, the needs of spouses and partners may require consideration; many couples simply can’t afford to move unless both are guaranteed employment. If the employee is already a homeowner, a home sale and purchase of a new home may also result in a significant loss on his/her investment. Each of these scenarios must be considered by companies seeking to relocate young professionals from the millennial age group.
What Market Trends Mean for Mobility Professionals
When devising relocation practices and policies, company stakeholders should consider millennials’ needs, along with the challenges they face as a population. They also should remember that factors related to the U.S. real estate market will dictate a need for both policy support, flexibility, and the management of employee expectations. While past practices have typically included the use of lump sum and managed lump sum programs for relocating millennials, current trends suggest a need to reexamine mobility program design, policy offerings, levels of support and guidance, and traditional home sale options as more millennials enter the housing market.
Download, How Millennials are Impacting the U.S. Housing Market, for more information or contact us at email@example.com.