It took them a while, but Millennials are finally starting to steady their financial footing, move out of their old bedrooms, and purchase homes of their own.

Born between 1980 and 2000, and 92 million strong, Millennials represent the largest generation in the U.S. But the group has taken longer than previous generations to hit traditional adult milestones such as marrying, living independently, having children, and buying homes, due to factors such as crushing student-loan debt, recession-caused unemployment or underemployment, and changing values.

That situation is changing. According to Goldman Sachs Global Investment Research, 27% of people aged 18 to 31 were married and living in their own households in 2017, up from 23% doing so at the same age in 2012, but still a long way off from the 43% of 18- to 31-year-olds who were married and living in their own households in 1981.

First-time home purchases rose 6% in the third quarter of 2017, over the same period a year earlier, with demand among first-time homebuyers at the highest level since 2000. A study by the National Association of Realtors shows the Millennial generation now represents 35% of the homebuyer market, particularly at the older range of the cohort.

There are still great disparities in rates of Millennial home ownership nationally.

Impediments to Millennial Home Ownership

It’s no wonder why they were late to the party. They have less money to spend – not because they’re eating avocado toast, as some would say – because they have an average student loan debt of about $41,000, according to the National Association of Realtors and the American Student Assistance agency.

Their report indicates that 83% of the Millennials who don’t own a home blame it on student debt. In fact, student loan debt is reportedly delaying homeownership by an estimated seven years. A survey by TD Ameritrade shows Millennials, on average, don’t expect to fully pay off their student loan debt until age 35.

Delayed marriage is another factor that has negatively impacted home ownership. According to the Pew Research Center, 61% of adults younger than 35 are living without a spouse or partner today. The study also shows that more than any other generation, Millennial households are headed by unmarried, cohabitating partners.

Obviously, it’s more difficult to afford a home on just one salary, but even when a single person’s income is equal to a couple’s combined joint income, housing experts say singles are still less likely to buy homes than married couples.

But perhaps the biggest issue is the shocking fact that, according to a report in Fortune magazine, Millennials earn 20% less than Baby Boomers did at the same age.

These and other factors make it difficult to save for a downpayment. A study by ABODO, a real estate company catering to Millennials, says, “If you assume that a Millennial making the median income saves 15% of their income each year, they would need an average of 15.6 years to save for a downpayment.”

Clearly the growth in Millennial home-buying is good news for the U.S. economy. According to the National Association of Home Builders, buyers of single-family homes spend $7,400 more on average than a homeowner who did not relocate that year. The report says, “Home buying triggers a ripple effect that stimulates greater economic activity – and points to a sound overall economy.”

But even with gains, there are still great disparities in rates of Millennial home ownership nationally. On one end of the spectrum, a study by ABODO reports that Millennial home ownership is at 51% outside Salt Lake City in Ogden, Utah, and at over 45% in Grand Rapids, Michigan. This contrasts dramatically with the approximately 18% of Millennials who own homes in the Los Angeles area, and 20% in the New York City area.

Strada, a new home community in Las Vegas, Nevada, by TRI Pointe Group.

Where and How Are Millennials Living?

A CBS News “Moneywatch” housing trends report indicates that, rather than moving to big urban centers on the Coasts, as some studies predicted, Millennials are settling down in small to mid-size cities – often near colleges and universities – that offer more affordably-priced homes for first-time buyers. The study expects large university towns such as Columbus, Ohio; Madison, Wisconsin; Omaha, Nebraska; Des Moines, Iowa; and Minneapolis, Minnesota, to see growth in Millennial home purchases this year.

Millennial Home magazine taps Richmond, Virginia, Memphis, New Orleans, Austin, Pittsburgh, Baltimore, Boston, and Miami as other cities where Millennials are moving.

To help pay their mortgages, Millennials often take on roommates. Builder magazine reports that non-family households with two or more unrelated people living together, was the fastest-growing household category in the past year. The finding suggests that new homes and home furnishings will need to be designed for non-conventional and multi-generational households in the future.

Some companies are already responding by offering unique homes and paths to home ownership, designed with Millennials in mind. A Seattle-area start-up called Loftium fronts downpayments of up to $50,000 on the promise that the buyer uses one room of the house as an Airbnb guest rental for one to three years, and splits that income with Loftium.

Alan Mascord Design Associates, a Portland, Oregon-based national provider of home-design services and ready-made house blueprints, is introducing more Millennial-influenced design plans with contemporary styling, smaller footprints, and features such as flexible guest suites with separate entrances that can be used to provide revenue as an Airbnb space, or eventually, to house aging parents or returning college students.

Other companies are getting creative in enticing Millennials to buy. Miami-based homebuilder Lennar, through its Eagle Home Mortgage division, recently launched its innovative Student Loan Debt Mortgage Program. It will contribute up to 3% of the home’s purchase price to pay the buyer’s student loans.

Aware that digital-native Millennials spend more time than other generations researching online before making any purchase, real estate group Zillow introduced a new site called RealEstate.com that helps first-time homebuyers navigate the search for a home that fits their budget. The site allows users to plug in their available downpayment and other costs, including private mortgage insurance and homeowner association fees, to be able to see their all-in monthly costs. Because prospective first-time buyers are often simultaneously considering renting as a living option, the program even has the ability to compare the head-to-head costs of homeownership to renting.

Maronda Homes in Pittsburgh also utilizes digital tools to attract young, first-time homebuyers. Its online visualizer allows customers to digitally build their house, swapping various options in and out to see how they look and how they impact the price.

Strada, a new subdivision of the Inspirada master-planned community in Henderson, Nevada, is a development of 100 homes created with Millennials in mind. Built by Pardee Homes, a division of TRI Pointe Group, the three Strada home designs are modeled after a Millennial-targeted concept home, called “The Responsive Home,” that was created for the 2016 NAHB International Builders’ Show using consumer research into the Millennial market by Ketchum Global Research and Analytics.

The Strada homes meet Millennials’ key requirements in that they are affordable; maximize space; offer opportunities for personalization; have flexible floorplans that change with homeowners’ life stages; have sizeable outdoor living areas and strong indoor-outdoor-living synergies; and have an urban-inspired community feel.

With prices making traditional home ownership still unattainable for many Millennials, some are seeking out more affordable alternative homes, such as houseboats and tiny houses. Sadly, RV and “van dwelling” in parking lots and along city streets is becoming another popular living choice among employees – even white-collar executives – at California’s major tech companies.

When they do buy homes, social-media-savvy Millennials turn it into an “Instagrammable” event and like to share photos of the milestone moment. According to Ypulse, real estate agents are increasingly facilitating the trend by arranging professional photo shoots for the new homeowners, so they can post photos on their social media pages. The agents credit the practice with “creating a domino effect among groups of friends” who are inspired to buy their own homes.

“Van dwelling” in parking lots and along city streets is becoming another popular living choice among Millennial employees – even white-collar executives – at California’s major tech companies.

What’s on Their Wish Lists

According to the National Association of Realtors’ Generational Housing Trends Study, Millennial buyers fall into two categories: young professionals who want a turnkey home with little to no renovation required, and creative DIYers, inspired by HGTV and Pinterest, who prefer to invest sweat-equity over time to personalize their home with features that add value and enhance their lifestyle.

Either way, Millennials want little to do with the mass-produced, 5,000-sq. ft. “McMansions” loaded with ornamental details, bump-outs, cathedral ceilings, and mix-matched stucco and stone materials that became the symbols of success (and excess) for their parents’ generation, according to “Business Insider.”

Instead, today’s “young, tech-focused, highly educated Millennials” are opting for the “McModern,” a modern-style home with strong vertical and horizontal lines, lots of natural light, and a “clean” aesthetic. “McModern” developments are reportedly particularly popular in the Southwest and on the East and West coasts.

Home features of chief importance to Millennial homebuyers: updated kitchens and bathrooms, and an open floorplan, according to the National Association of Realtors. Other often-requested home features dovetail with today’s lifestyle trends. With 13 million Americans now working from home, many Millennials want a house with room for a home office. Likewise, because they are ditching landline phones, they require a home with strong Internet and cell service.

Bobby Berk, creative director for the Responsive Home and Strada model homes, says Millennials have a strong desire for entertaining space, particularly indoor-outdoor entertaining space, in the homes they buy. To achieve this, the Strada homes have window walls, sliding doors and optional stacking doors to open interior spaces to the outdoor courtyard and rear-yard areas. Berk further created a seamless transition between interior and exterior spaces by using the same wood-look ceramic-tile flooring indoors and out.

In the models, he created distinct rooms within the outdoor spaces to highlight all the entertaining opportunities and inspire prospective buyers. He utilized “some really cool, affordable, and attainable features,” such as cinderblock planters, corrugated-steel box-planters for herb gardening, outdoor fireplaces, and a barbecue area with a built-in bar, to show potential buyers how to achieve the look within budget.

“The indoor-outdoor relationship is extremely important to the Millennial buyer,” explains Klif Andrews, president of Pardee Homes Las Vegas, builders of the Strada community. “It’s driven by their desire to entertain friends at home. They see the outdoor space as a big entertaining space that’s integrated into the house, not as a separate backyard.”

Millennials also are looking for fresh, innovative design, and contemporary styling. “Windows are a big deal to the cohort,” according to Andrews. “They prefer windows over blank walls on which you might place furniture, so we include a lot of windows in our Strada homes.” Although Millennials may have stretched financially to buy their home, they will still go for certain upgrades that allow them to customize and personalize their space, according to Andrews. “Customization is very important to the Millennial buyer,” he adds. “They want to know what options their neighbors are selecting. They want to be unique but stylish.

“I can also tell you what they’re NOT looking for,” Andrews continues, with a laugh. “Millennials don’t want three-car garages, or big spaces, in general. They don’t want a lot of bedrooms – two or three are fine. They don’t value closet space because they are not acquirers – they get rid of stuff. They don’t want a lot of cabinets, because they don’t have enough stuff to fill them. They don’t want formal living rooms, or large dining spaces with room for traditional china hutches; they don’t own them.”

Example: In the Greater San Francisco area, the average downpayment is $143,563; it will require Millennials 28.7 years to save that much money.

Chicago-based interior designer Anthony Michael says approximately 20% of his clients are Millennials, and the business segment is growing. In an article in Millennial Home magazine he shares that Millennials, “Do not want their parents’ homes or styles,” preferring pops of color over neutral shades, and modern designs and furnishings over traditional styles.

He bemoans Millennials’ “disposable-furniture mindset,” but says they “love the WOW factor” and like to incorporate unique statement pieces in their décor. Michael says Millennials use HGTV, Houzz, Pinterest and other online sites for design ideas, but the designer finds the group “more willing to listen (to his suggestions) than Baby Boomers.”

Michael shares another insight: growing up in the age of Amazon where they can get almost anything delivered in two days, Millennials expect instant gratification and don’t like to wait. Michael also shares that Millennials tend to have unrealistic budgets for all the things on their wish lists, neglecting to factor in costs for electrical, plumbing and other behind-the-scenes work. He blames home-decorating reality TV shows for distorting expectations.

Andrews calls Millennials a “very frugal and practical” generation, and says they are “very choosy” about how and on what they spend their money. “They want custom features and upgrades, but they don’t have to be expensive,” he says. For instance, he says visitors to the Strada model homes have “loved” a distinctive yet inexpensive blue tile backsplash, but tend not to go for pricy granite upgrades. He says Berk outfitted the model homes with IKEA furniture to show “on-trend design that is attainable and affordable.”

Forbes magazine agrees with Andrews, calling Millennials a frugal, cost-conscious cohort that demands value. As a result, what they buy and where they shop for furnishings and accessories to decorate their homes also is different from previous generations. A report on “Marketwatch,” says the generation has Internet shopping “in their DNA” and is very comfortable buying goods online. But while they are increasingly purchasing clothing, groceries and beauty products off the Internet, the report predicts that homewares stores such as Williams Sonoma, Pottery Barn, and HomeGoods should see a surge in the coming years.

By the end of 2019, single-family starts will be at 73% of normal (2000-2003). Data from NAHB.

Renters Still a Big Segment

Andrews points out that the Millennial generation encompasses a wide range of ages and life stages and it’s a mistake to paint them with a single, broad brush. While it’s true that older Millennials are leading the way into home buying, many are still renting. In fact, reports show 18.4 million, or 56% of all U.S. renters are Millennials, dominating all other generations.

“The New York Times even declared 2017 the year of the renter,” says Andrews. Millennial trends monitor Ypulse says the generation chooses to rent, not just because they believe it’s more affordable than buying, but as a lifestyle choice and out of a desire for convenience and flexibility.

Given a study by research firm Mintel, showing 75% of Americans in their 30s have dogs and 51% have cats (compared to 50% and 35%, respectively, among the overall population), it’s no surprise that Millennial renters prioritize apartment buildings that allow pets.

In addition, a study conducted by the National Multifamily Housing Council and real estate research firm Kingsley Associates finds Millennials are twice as likely as Baby Boomers to prioritize outdoor recreation facilities. They are 18% more interested in onsite fitness centers, and nearly 14% more interested in having access to a lounge area or party room in their buildings. Given that 55% express a desire for community involvement, it’s not surprising the generation also prefers buildings that offer organized group activities such as movies, lectures, pool parties, cookouts, and yoga classes.

Co-living is catching on as another trend among Millennial renters. Co-living buildings typically have very small individual apartments, but large, shared, common areas such as lounges, co-working spaces, and rooftop terraces, and often hotel-style amenities such as housekeeping and concierge services.

The trend has spawned a host of temporary decorating solutions for people who may not be staying in their current living environments for very long and are not allowed to, or don’t want to, invest in permanent renovations or decorating elements. These products include temporary laminate flooring, peel-and-stick backsplash tiles, and removable wallpaper. Outdoors, there are wooden decking tiles that can be placed over an existing patio or deck surface, and removed just as easily.

Likewise, more companies are creating small-scale, multifunctional furnishings designed to help Millennials live better in three-digit-square-foot rentals, with “fluid” rooms, and often roommates. IKEA, for one, offers coffee tables that convert to desks, floor lamps with built-in phone-charging stations, and movable room dividers that double as storage units. West Elm has convertible coffee tables; beds and sofas with built-in storage; and space-saving nightstands with built-in, motion-activated lights, lockable drawers, two USB ports, and Bluetooth audio systems.

Takeaways for Hearth, Patio and Barbecue Retailers and Manufacturers

Similar to companies just mentioned, hearth, patio and barbecue manufacturers and retailers will have to respond to the needs of this unique and powerful buying group. The good news is that the Millennial generation loves to entertain at home, so products that help facilitate that, such as outdoor kitchens, bars and patio furnishings, should be popular with them.

They also love “wow-factor” elements, which means unique, statement-making indoor fireplaces or outdoor fire pits might be something they would spring for. Best of all, Millennials, more than any other generation, love the idea of outdoor living. They consider the patio space an extension of their home and want to outfit it as such.

This is a generation for whom “stuff” holds little importance; instead, they prefer experiences. To tap into this desire, experts say marketing and advertising should be less product-focused, but rather speak more to the lifestyle experiences these products provide. Instead of highlighting the grills’ attributes and features, emphasize the fun and delicious food that can be had while cooking and entertaining in an outdoor kitchen. Similarly, romanticize the coziness of gathering with friends and family around an indoor or outdoor hearth.

Millennials are digital natives, so they are mining Houzz, Pinterest and other online sources for design inspiration. Manufacturers and retailers of hearth, patio and barbecue products should ensure they are easily found when consumers search for fireplaces, outdoor kitchens, Outdoor Rooms, and other key terms on those sites. It’s important to take photos (unless you’re good at it, hire a professional) of completed Outdoor Rooms, fireplaces, outdoor kitchens, fire pits, and other projects, and post them on all available social media platforms.

The goal is to inspire potential Millennial customers with ideas for creating these lifestyle and entertaining experiences in their own homes. You want to position your store and staff as experts who can help them achieve these experiences in a way no online retailer can.

Social-media-savvy Millennials share photos of the home purchase on Instagram.

The one fly in the ointment is that, at least for now, this is a frugal and mobile generation. It remains to be seen if Millennials will loosen their purse strings as their incomes improve, but if not, this trait will influence what they buy and how much they are willing to spend. For instance, Millennial homeowners are likely to forgo permanent, masonry outdoor kitchens, bars, fire pits and outdoor fireplaces, and instead opt for less expensive and more mobile, modular, outdoor cabinetry systems, and portable fire pits and fire tables that can be relocated and reconfigured should they move. Likewise, their smaller houses and yards will dictate a need for smaller-scale outdoor furnishings, grills, and indoor and outdoor hearth elements.

Manufacturers might also want to consider developing do-it-yourself kits so frugal, HGTV-inspired Millennials can build their own outdoor grilling stations, pergolas, fire pits, or outdoor bars. Retailers who sell these kits can offer instructional classes on how to build them, as another revenue source.

Millennials may not be your customers now, but they will be in just a few years – if not sooner. It’s time to get prepared.