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They’re finally growing up — and Millennials could create more challenges for the housing market.

Nearly 45 million Americans will reach the typical age for first-time home buyers within the next decade, 3.1 million more than the previous decade, according to a report in Forbes. But not only are there likely to be more buyers, the cost of starter homes has gone up considerably, gaining 57.3% in value over the past five years.

To tap into the mind of Millennials (categorized as people aged 23-38), TD Bank surveyed 850 of them who were planning to buy their first home in 2020.

Some of the findings:

• 68% said they think now is the time to buy a home
• 52% are actively searching home listings online
• 75% admit they’re overwhelmed by the process of buying a home
• 57% said they are worried about the state of the economy

But here’s a reality check: Only 52% said they had started saving for a down payment and 53% had reviewed their credit reports. In addition, only 42% said they had created a budget for their home purchase.

There are also built-in disadvantages. Major cities price out the middle class, favoring luxury homes and condos. Millennials also are dealing with a mountain of debt. In households headed by someone younger than 35, median debt swelled from $21,000 in 1989 to $39,000 in 2016. Meanwhile, during that same span, under-35 households with student loan debt jumped from 17 percent to 45 percent.

This all begs the question: When boomers are ready to sell homes, will Millennials be able to afford them?

“We’re looking at a generation that will have lower lifetime wealth,” Jenny Schuetz, a housing policy expert at the Brookings Institution, was quoted as saying in the Washington Post. “That’s bad news for the economy overall, not just millennials.”

According to a different Forbes report, Minneapolis, Buffalo, New York, and San Jose, California, are the metropolitan markets where Millennials make up the largest percentage of purchase requests. In Minneapolis, 56.2% of purchase requests were from Millennials. Also in Minneapolis, the average Millennial age was 30.4, credit score was 672 and requested loan amount was $219,590.

There’s another potential interesting twist: What constitutes a desired home? Baby boomers favored multi-story houses with big lawns, yet early signs suggest Millennials do not seek such homes. Large, single-family homes between 2,900 square feet and 4,000 square feet received 12% to 45% fewer views on realtor.com, Business Insider posted. Such homes also were selling, on average, 75% slower.

The Evolution from Standard Commission to Flat Fee in Real Estate

Times change. Businesses and processes evolve.

So why are most owners still paying a 6% commission to sell their home?

That’s precisely what the U.S. Department of Justice’s Antitrust Division wanted to know.

In January 2016, it published a study titled, “Competition and Real Estate,: noting that the industry has been “slower to change” and leaving consumers to pay “higher commissions and fees than they would under a more competitive system.”

Years ago, before cell phones and the internet, listing agents had a lot to do, from creating ads, distributing them to local newspapers and answering questions from potential buyers, negotiating the sale price and managing the entire process, much of it requiring reams of paper.

But technology has streamlined so many steps in real estate, and listing sites such as Trulia and Zillow provide buyers access to available homes. A similar impact has changed the way consumers travel, with websites such as Expedia, Kayak, Priceline and Travelocity dramatically reducing the need for travel agents. A similar impact has changed the way consumers make investments.

“It was obvious… the traditional system no longer operates in line with what the consumer needs in the 21st century,” Lindy Chapman told CNN in May 2019. “The client wants Netflix and the technology for Netflix is here. And it’s like Blockbuster saying, ‘No, this is the only way to watch videos.’ ”

So why is real estate so stuck in the past?

There’s clearly still a need; 5.34 million homes were sold in 2018, according to the National Association of Realtors. Not surprisingly, there are a shocking number of licensed realtors, 1.35 million, according to NAR.

That’s due, in part, to the low barrier to obtain a license, certainly not as rigorous as becoming a doctor, lawyer or accountant, among other jobs. If you’re 18 years old and a high school graduate, then you can earn your real estate license by passing an exam.

Who doesn’t know someone whose cousin works a full-time job and also has a real estate license?

But the antiquated process is still profitable for realtors. Agents in the top 25th percentile made nearly $72,000 in 2017, according to U.S. News.

Real estate insiders and outsiders grew weary of the old way and investigated ways to disrupt the industry. Legal and creative services and residential contractors were among those successfully utilizing flat-fee models.

Shift is among the companies at the forefront of change, tapping technology and teamwork to streamline real estate — then pass the savings on to clients.