Just a few years ago, many car dealers and homebuilders were worried that millennials would forever want to be urban hipsters, uninterested in buying cars or homes.
But now, as millennials get older — and richer — more of them are buying SUVs to drive to their suburban homes.
The National Association of Realtors' 2017 Home Buyer and Seller Generational Trends study found that millennials were the largest group of homebuyers for the fourth consecutive year.
Zillow's chief economist, Svenja Gudell, says that for millennials, growing older is beginning to mean buying a house in the suburbs.
The Great Recession acted as a pause button for many choices that Gudell says millennials were already going to be slow to make.
"We're seeing that the age at which women have kids has also gone up. And so instead of having children in their late 20s, you might start having kids when you're in your early 30s at this point," she says.
Generationally speaking, the stereotype of millennials as urbanites falls flat when it comes to homeownership. The Zillow 2016 Consumer Housing Trends Report found that 47 percent of millennial homeowners live in the suburbs, with 33 percent settling in an urban setting and 20 percent opting for a rural area.
Millennial homebuyers do wait longer to buy a first home than did previous generations. But they are skipping the traditional "starter home" and buying larger homes that were previously considered the norm for "move up" buyers.
And how are millennials navigating the suburbs? With SUVs, according to several recent studies.
Michelle Krebs, an executive analyst at Autotrader, says college debt kept millennials out of the car market, but now that's changing.
In 2011, millennials were just 20 percent of the market. They're about 30 percent now, and Krebs says that they'll be 40 percent of the market before the next decade if current trends continue.
Erich Merkle, an economist with Ford, says that as millennials cross the threshold into family life, they're buying large SUVs.
"We expect them to carry on as they age with three-row SUVs and likely go larger simply because they need the space to accommodate children that are now teenagers or preteenagers," he said.
Ford expects all SUV sales to grow from 40 percent to more than 45 percent of the total U.S. new vehicle market within the next five to seven years.
Millennials just might be mainstream after all.
AILSA CHANG, HOST:
Millennials are beginning to act more like their parents. This is the generation that was born after 1980. They came of age during the Great Recession. And now, as they grow older and have children, many are doing things like buying SUVs and homes. NPR's Sonari Glinton takes a look.
SONARI GLINTON, BYLINE: For the last decade or so we've heard a lot about how millennials are different from the rest of us. As a matter of fact, I've even done some of that reporting. And it turns out, well, not so much.
MICHELLE KREBS: Millennials are pretty mainstream when it gets right down to it, especially when they start creating households and having families.
GLINTON: So who are you (laughter)?
KREBS: Who am I? I'm Michelle Krebs, executive analyst with AutoTrader. And remember that this is the generation that just got clobbered during the Great Recession. They came out of college just loaded down with debt. And they were unemployed, underemployed, moving back in with mom and dad. So they were set behind economically.
GLINTON: Krebs says this kept millennials out of the car market. But that's changing. In 2011, Krebs says millennials were 20 percent of the market. They're about 30 now. They'll be 40 percent of the market before the next decade if current trends continue. Growing older also is beginning to mean buying a house in the suburbs, says Svenja Gudell, the chief economist with Zillow.
SVENJA GUDELL: When it comes time for millennials to actually purchase a home, oftentimes they choose suburbs over urban neighborhoods.
GLINTON: Zillow, by the way, is the real estate site. Gudell says millennials as a generation were scarred by the last Great Recession.
GUDELL: If you graduate into a recession, your lifetime earnings are likely to be lower than someone who doesn't graduate into a recession.
GLINTON: The car and housing surveys show that the result of that scarring is millennials are much more budget-conscious than their older siblings, Gen Xers, and their baby boomer parents. The recession acted kind of as a big pause button for many choices Gudell says millennials were already going to be slow to make.
GUDELL: They end up dating for a longer amount of time before they actually end up getting married. And then we're seeing that the age at which women have kids has also gone up. And so instead of having children in your late 20s, you might start having kids when you're in your early 30s at this point.
GLINTON: Now, it's important to note that all millennials haven't given up their fixed-gear bikes and their downtown lofts. It's the oldest millennials who are entering a sort of key age, over 35. Now, depending on who you talk to, the oldest millennials are 37. As they cross that threshold Erich Merkle, an economist with Ford, says the group is buying SUVs - large ones. And the best-seller for millennials for Ford is their large SUV, the Explorer.
ERICH MERKLE: We expect them to carry on as they age with three-row SUVs and likely go larger simply because they need the space that - to accommodate children that are now teenagers or preteenagers.
GLINTON: This all seems good for the car companies, right? Well, Michelle Krebs, the auto analyst, says not so fast.
KREBS: We know that millennials will buy one car. Will they be like the baby boomers and have 2, 3 or more cars in the driveway, in the household fleet?
GLINTON: That's kind of the looming trillion-dollar question for the auto industry. Though as a Gen Xer, it's kind of fun to think millennials aren't that special. Sonari Glinton, NPR News.
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