We’ve got a new acronym on our hands: HENRY. High Earners, Not Rich Yet is the latest segment to define trends in the housing market. This subsect of millennials has changed the way real estate agents are defining luxury housing.
Who are HENRYs?
High Earners, Not Rich Yet are defined as millennials just getting used to having discretionary income. The annual household income benchmark varies, but can be considered anything above $100,000. HENRYs are set to be the next generation of affluent customers, and are highly likely to be wealthy in the future.
This group also tends to make their six-figure salaries off of careers rather than income-generating assets. This sets them apart from wealthy compatriots by being part of the “working rich”—making money is dependent on keeping a job.Thus, HENRYs make purchasing decisions based on different priorities than previous generations.
How HENRYs are changing the luxury market
The dream of homeownership with this group is alive and well—97 percent either own a home or are planning on purchasing a home, according to a recent study. Additionally, three-quarters of them already own or are planning to own a second home.
What HENRYs are impacting is what is considered a luxury home. In terms of what makes a brand a luxury brand, 80 percent said superior quality, 64 percent cited reputation, while less than half said a premium price. Same goes for buying a home: only 38 percent of HENRYs in the study said price was an indicator of a luxury home. Instead, this group is putting more weight in finishes, followed closely by location and amenities.
So now the definition of luxury is a lifestyle, and a home suited to that lifestyle, that the HENRYs value and want to lead. This group is curating a lifestyle that fits their individual tastes; what’s considered a luxury home to one might not qualify as another. This opens the door for the luxury title: look for a more broad definition of what this means in terms of homes on the market—it no longer only refers to the price tag.
