The past few years have been tiring if you happen to be a millennial. There has been countless articles talking about how this group are not buying houses or vehicles. Of course, the reason is that millennials don't have the money (saddled with more debt, having entry-level salaries, etc). But that is changing. According to a report from Bloomberg, millennials are beginning to head out to the suburbs, and purchasing houses and cars. The reason? They're having their baby boom.
According to data from the Zillow Group, Americans aged from 18 to 34 have become the largest group of home buyers, with almost half living in the suburbs. They're upsizing their vehicles as well to go with their new home. Large SUV sales jumped 11 percent in first half of this year according to Ford Motor Co. Midsize SUVs rose 9 percent and small SUVs jumped 4 percent in the same timeframe.
“We do see that demographic group driving larger sport utility sales as they acquire homes, create families and gain some wealth,” said Michelle Krebs, an analyst at car-shopping website Autotrader.
“They started with compact sport utilities and now, with families, they’re moving up.”
Expect more millennials to follow suit. LMC Automotive estimates that sales of large SUVs will rise 25 percent between now and 2025.
“There’s no question people are waiting longer, but people still want to have children. As long as people have children and those children grow and acquire friendships, it requires more space,” said Erich Merkle, Ford’s U.S. sales analyst.
Currently, the largest group of buyers for midsize and large SUVs are Gen Xers, but millennials are expected to eclipse them due to there being a large number of them - about 80 million.
“There’s going to be an extra 25 million people passing into and through the 35- to 44-year-old demographic over the next 10 to 15 years,” Merkle said.
“That’s going to lead to a gradual increase in the growth of large and midsize SUVs that’s already starting to happen.”