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Homebuying Millennials Starting at the Top

National  + Industrial  | 

Recent reports that the millennial generation was foregoing homeownership in favor of renting may have been a bit premature.

According to Toll Bros Inc., the largest U.S. luxury-home builder, millennials have become a force in the market for new high-end homes. Toll Brothers says that 23% of its sales this year were to customers with at least one buyer age 35 or younger. That was a surprise, given that the company’s average contract price in the three months through July was $837,300.

Buyers in their 20s and 30s have been slow to purchase for good reason. They’re marrying and having children later and face a tight existing-home market, where sellers routinely get multiple offers. But the delay has given some of them time to save for a down payment.

“We’ve been pleasantly surprised,” indicated Fred Cooper, senior vice president of investor relations at Toll. “These people, who may each have 10 years of work under their belts, can afford a first home that is more luxurious than what one thinks of as the typical starter home.”

Homeownership by young people is still low by historic standards. Buyers from 18 to 34 years old possess 11% of U.S. owner-occupied houses, according to an analysis of Census Bureau data by real estate website Trulia. When baby boomers were that age, they owned homes at almost twice that level.

Megan McGrath, an analyst at MKM Holdings LLC in Stamford, Connecticut, said Toll now is seeing only the oldest of the millennials among its buyers. Many more will follow, she said.

“Part of it is generational — millennials didn’t feel the need to buy a starter home, and maybe couldn’t and they waited until they were in their 30s,” she said. “Maybe now they’re just skipping over the starter home and buying a higher-priced alternative.”

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.