By August 22, 2017 Read More →

More millennial Americans move to the suburbs, buy SUVs


Ford expects sales of SUVs to grow from its current 40 per cent to 45 per cent of the US market in the coming five to seven years. Getty Images photo by Joe Raedle.

Millennial Americans start their own baby boom

A report by Bloomberg says more American millennials are leaving the big city, moving to the suburbs, buying big SUVs and having babies.

Zillow Group data shows people between the ages of 18 and 34 have become the largest group of homebuyers and almost half of them are living in the suburbs.  Zillow found that last year, 42 per cent of homebuyers were millennials.

Trans Mountain ExpansionAlong with the move to the ‘burbs, they are shopping for larger vehicles.  US industry sales of large SUVs were up 11 per cent in the first half of 2017, according to Ford Motors.  Midsize vehicles were up 9 per cent and small SUV purchases were up 4 per cent.

“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 told Bloomberg. “They started with compact sport utilities and now, with families, they’re moving up.”

The trend may surprise many as a number of millennials have delayed marriage, having kids and owning homes.

“As more people move out of their parents’ basement — and there’s still quite a few living there — we expect to see continued healthy demand for homes,” said Svenja Gudell, chief economist for Zillow told Bloomberg.  “Millennials delayed home ownership, just like they delayed getting married and having kids, but now they’re making very similar decisions to their parents.”

Analysts expect sales of midsize SUVs to grow by 16 per cent between now and 2022 as more millennials buy bigger SUVs to accommodate children, strollers and baby necessities.

“As a sample size of one, I certainly need a lot of space because it’s really tough to travel with a child,” Gudell told Bloomberg, who drives an Audi Q5 SUV.

In a June survey conducted by Ford, millennials said having kids, buying a suburban home and driving a big family vehicle was more important to them than living in a large city or relying on alternate forms of transportation.

“There’s no question people are waiting longer, but people still want to have children,” Erich Merkle, Ford’s U.S. sales analyst, told Bloomberg. “As long as people have children and those children grow and acquire friendships, it requires more space.”

Merkle said currently, the largest group of midsize and large SUV buyers are Gen-Xer’s between the ages of 35 and 44.  The Gen X demographic is significantly smaller than the 80 million strong millennial group.

In the coming 15 years, as millennials move into the 35-44 year old demographic, Merkle says “that’s going to lead to a gradual increase in the growth of large and midsize SUVs that’s already starting to happen.”

According to Bloomberg, Merkle would not say if Ford expects sales of large SUVs to eventually outpace compact utilities, which have surged past family sedans like the Toyota Camry and Honda Accord.  Ford does expect SUV sales will grow from its current 40 per cent to 45 per cent of the US market in the coming five to seven years.

The US Centers for Disease Control and Prevention says millennials, the oldest of whom have boosted the annual birthrate for women 30 to 34 to the highest level since 1964.


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