According to the National Association of Realtors^®, Millennials, born from approximately 1980 to 1996, have been the largest share of buyers since NAR's 2014 report. The most recent data shows that 82% of younger Millennials and 48% of older Millennials were first-time homebuyers, more than other age groups.

Specific to military buyers who are using VA Home Loans, Generation Z servicemembers — aged 18 to 24 — were up 123% year over year, according to 2021 data from the VA. In addition, loans from Millennial and Gen Z Veterans accounted for 52% of all VA purchase loans made in the first half of 2021, up from 47% a year earlier, their analysis showed.

Advantages for Military Buyers

Young VA-eligible buyers may have an advantage over their civilian counterparts in a couple of ways. Since most are eligible for some form of educational benefit, either through the G.I. Bill, scholarship or other tuition assistance program, they aren’t as saddled with student debt as other buyers may be.

They’re also able to take advantage of skipping a down payment, not paying for private mortgage insurance (PMI), and being able to purchase with a credit score of 580 or higher. (This varies by lender and is not a VA requirement.) However, in place of PMI, VA Home Loans require the borrower to pay a VA Funding Fee. Check out the VA.gov website for these fees which vary by loan product, and first-time or second-time use of the VA Loan benefit.

As far as “older” Millennial servicemembers, they may also be nearing retirement or have retired recently and are ready to put down permanent roots.

Related: Purchasing a Starter Home

What They Want

The growing presence of young homebuyers, both military and civilian, has been chronicled by thousands of media outlets. According to the Wall Street Journal, these buyers prefer a close-to-the-city suburb, short commute, and living in a smaller home if it has resort-like amenities. “These generational habits are so pervasive that they are anointing new areas as ultra-luxury spots and sending some previously desirable locations into a downward price spiral,” says the Journal.

This group’s preferences is a guideline for sellers, builders, and real estate brokerages who want to expand their business among young buyers.

Here are four priorities we think you’ll see in this market as the influx of young buyers continues:

1. They prefer new construction — Young homebuyers are not big fans of “fixer-uppers” . Real estate research strongly suggests that this under-40 group favors new home construction. Why? In light of concerns over COVID-19 variants they are reluctant to walk through existing (lived-in) homes, plus they don’t want to deal with the chronic maintenance of older homes. One other advantage, these homes are often pre-wired for smart technology.


2. They avoid McMansions — Even when young buyers can afford a 3,000+ square-foot home, most young buyers are showing an eco-friendly approach in preferring smaller homes with luxury amenities like impressive outdoor living spaces, hardwood floors, and polished granite countertops. In some cases, these smaller homes have homeowner associations and landscaping services making them extremely low maintenance.


3. They like living large — Even before the pandemic swelled the number of people working from home, younger buyers were already moving into the suburbs in “master-planned” communities with resort-like amenities like hiking/biking trails and posh entertainment areas.


4. They want an active and like-minded community — When you work with Millennial and Gen Z buyers, you hear a lot about their wanting to “live an authentic life” as part of a larger and active community. The WSJ article on this group succinctly sums this up. “If they do move to the suburbs, they still want to socialize, which has given rise to a price divide within suburbs between walkable and non-walkable areas. The number-one thing most of these younger buyers are looking for is a sense of community.” We are seeing this trend among our own young Members who are often moving near a base where they may have served to be part of a close-knit military community.

Related: Why We Choose to Work With Active Military/Veterans (And You Should, Too)

We’re Here to Help

Whether you’re just thinking about buying, ready to start home-shopping in earnest, or thinking about refinancing, one of our Military Mortgage Advisors will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of low-rate and low-cost mortgages designed to meet your needs.

VA Loans remain popular with our Members for many reasons, including their competitive interest rates (about 2.920%, according to Bankrate's latest survey), no down payment may be required, you can often qualify with a credit score of 580 or higher, and no private mortgage insurance (although you will pay a VA Funding Fee).

Ensuring AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-211-6308!