By CHUCK GREEN
While many Millennials and some Gen Zers have flown the coop, a number of them don’t have to save up their frequent flyer miles to get back home.
As it turns out, a hefty portion of both groups aren’t straying far.
In a survey of nearly 2,000 U.S. Millennials and Gen Zers to determine how close they live to their parents and why, LendingTree found that the majority of them are choosing to lay down a welcome mat of their own in their hometown.
57% of Millennials and Gen Zers have settled in their hometowns. 42% of those who never uprooted felt it was incumbent upon them to remain close to family, while convenience compelled 36% to do so.
The main reason why people often stick around their hometowns is because they want to be near loved ones, Jacob Channel, senior economist at LendingTree, told The Mortgage Note.
Remaining near family is important among 68% of the young Americans surveyed, and 60% of those who indicated it was important said they enjoy being close to where they grew up.
Of course, economic reasons are also likely to play a role. For 33% of survey respondents, their wallet had the final say in their decision to stay put because they couldn’t afford to move.
Channel said even if they might have the money to go someplace else, “It’s worth pointing out that living near family and being able to depend on them for things like child care can still free up quite a bit of money in a young family’s budget.”
In the survey, 73% of Millennial and Gen Z parents of children under 18 agreed with the importance of having family nearby.
The fact that both groups are sticking relatively close to home doesn’t surprise Dana Bull of Dana Bull Real Estate Consulting in Marblehead, Massachusetts.
Probably the most obvious reason behind sticking close to home among the two “is to be close to family and grandkids to build relationships and provide support. The cost of child care is staggering. If a parent is available to help out a few days a week with grandchildren, that can be a huge savings,” Bull said.
“This is the case for me as well as my two siblings and the three adult kids in my husband’s family! We all live within one hour of our childhood homes and parents.”
Bull said she seems to attract real estate clients who were born and raised in the Boston area and settled there, too. Anecdotally, here’s why, she explained:
“It’s what we know. It’s easier to make confident real estate decisions when you’re familiar with the neighborhoods and the lifestyle the neighborhoods offer. Many of my clients loved their childhoods and want to replicate that experience for their own kids,” Bull said.
Bull said that parents also influence the decisions of their children when it comes to real estate transactions.
“My clients regularly invite their parents to showings and home inspections because they want their feedback and approval,” she said.
The pandemic brought many families closer together, and they want to stay that way.
Covid has influenced Millennials and Gen Zers to live closer to home, according to Anthony Marguleas, founder and broker at Amalfi Estates in Pacific Palisades, California.
“It has caused a reprioritization of family and how important it is,” Marguleas said.
People spent more time with their families during the lockdown and pandemic.
“In general, it brought families closer together – especially ones that lost loved ones or had serious complications,” he said.
Then there’s the matter of the wallet. Home prices have risen nearly 50% nationally since the beginning of 2020, and rents have also gone up due to a lack of housing supply.
“The cost of housing has gone up so much that most can’t afford to live on their own. So, if they can stay with the family longer and save funds, they’re doing that,” Marguleas said. “We saw this less in past generations since affordability was less of an issue.”
Channel noted that moving away from where you grew up can be hard — not just for financial reasons – but emotional ones as well.
“Going forward, we’ll probably continue to see plenty of people deciding to stick around their hometowns,” Channel said.
On top of that, “if housing costs continue to rise over the coming decades, there’s a good chance that we’ll see more people choose not only to remain in their hometowns but to remain in their parents’ homes.”
By the time they hit 26, more than two-thirds of young adults in the country resided where they were raised.
That’s according to a study by the U.S. Census Bureau and researchers from Harvard University, and reported by AP News.
The likelihood of those born primarily between 1984 and 1992 moving from the commuting zone they were raised in was the focus of the study.
Among those who relocated, 80% landed less than 100 miles away; 90%, under 500 miles. Those of Black and Hispanic heritage migrated a shorter distance than their white and Asian counterparts.
Broken down geographically, in the Chicago area, three quarters of those of were raised there remained. Among young Black adults leaving their hometowns, Atlanta was the most popular place to go. Houston and Washington followed.
Meanwhile, New York, Los Angeles, Washington, and Denver were the top places to land for white adults placing their hometowns in the rearview mirror. Asian and Hispanic young adults laid down stakes in Los Angeles and New York. Hispanics also found San Antonio and Phoenix places they wanted to call home; San Francisco was high on the list among Asian young adults.
What does this mean for realtors and loan officers?
Channel said if you’re in the business of trying to help someone find a home or get a loan, “then knowing that they might not mind living near their parents can make it easier for you to help them reach their goal.”
Realtors might not need to worry as much about finding their clients a place in a competitive and trendy neighborhood if more lowkey options closer to mom and dad will work instead, he said.
As for loan officers, perhaps they could “offer insight to prospective buyers about how getting a loan in their hometown usually works or what kinds of mortgage types tend to work best for younger buyers in the area,” Channel said.
It’s important for real estate professionals to note that this probably isn’t a new trend in the market.
Natasha Pilkauskas, associate professor of public policy at the University of Michigan, said that “given how common it is to live near family, it would stand to reason it’s likely because folks stay in their hometowns. My sense is this isn’t a new phenomenon.”
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