When Kealoha Yoshioka was 27 and buying his first home – a fully renovated condo in Campbell, Calif. – he was dazzled by the extras: the dual bathroom sinks, the crown molding, the granite countertops.

Now, three years after his first home buying experience, the shine is off the extras, and he’s upside down in his mortgage. The allowance his wife and his accountant mother-in-law put him on for his Xbox games is all but gone, and the big expense is the couple’s 10-month-old puppy, Shiba. Yoshioka still wants all the bells and whistles in his next home – and he wants that new home to come soon, as the couple considers starting a family. But for the first time in his life, Yoshioka is doing something new: waiting.

“The niceties, the granite would be nice to have, but I wouldn’t get them unless I needed them at this point,” he says. “And it would be a good thing for us to move, but we’ll wait it out. Everyone tells us the same thing: ‘Wait. Be comfortable where you are.’”

But he’s not entirely comfortable. The last three years have been a crash course in real estate reality for Yoshioka and others like him in the Millennial Generation. For years, people have thought of the Millennials – folks between the ages of 15 and 32 – as the want-it-all generation: A generation so addicted to credit and so used to their parents’ lavish lifestyles that they’ll pay extra for the amenities that their parents traded up to have. Today, that desire holds fast, but the need to hold off is tempering their enthusiasm.

The bubble generation

That enthusiasm is expected to change home buying trends as the economy improves, says Terrye Underwood, senior principal at real estate research firm RCLCO in Los Angeles. As a group, Millennials, also called Generation Y, is larger than the Baby Boomers – there are 80 million of them compared to about 60 million Baby Boomers. Plus, they have more earning power than the generation before it, about $200 billion compared to $125 billion of Generation X.

“Generation Y stands to create the biggest wave of first-time home buyers ever in 2012,” said Underwood, speaking at PCBC, a builders’ conference, in June. “With this generation, we might naturally grow ourselves out of the current housing slump.”

But Millennials are also children of the housing bubble. They grew up with laxer credit rules than previous generations and with the first generation of mortgages that untethered income and employment from lending limits. Some watched parents repeatedly refinance or flip houses for quick profit.

That, combined with their earning potential and the not-so-distant frenzy of the housing market have made their have-it-all attitude seem rational, says Sam DeBord, Realtor and broker at SeattleHome.com.

“They bought nicer homes than their parents currently owned,” he says. “They wanted to make it happen quickly and it was status-driven as opposed to being about what they could really afford or what they really wanted.”

This was true of every generation in the lead up to the housing crash, of course. But for Gen Y, which had never experienced 15 percent interest rates, let alone a serious recession, it also made the generation more vulnerable to predatory loans and to the impulse to take out mortgages for more than they could afford, he says.

Today, DeBord sees a shift in the thought process of the Millennials he works with that’s affecting home buying trends. Like everyone else since the economic slowdown, Millennials assume they’ll own their first home longer and don’t assume it will function as an ATM. Most importantly, they have to be careful about how much they borrow.

“They’ve learned caution,” says Susan Seal, associate broker at Houlihan Lawrence in New York City. “They no longer let themselves fall in love with a home, but agonize about the potential rise and fall of the future market.”

Jumping in

Gen Y has also learned something else about home buying: In a buyers market, they may be able to actually afford all those bells and whistles this time around. That’s what Jeremy Schessee, 31, found when he started house-hunting in June.

He bought an 824-square-foot, one-bedroom condo in a brand-new development in San Jose, Calif. He got many of the upgrades: tile floor, granite countertops, high-end appliances, hardwood floors in the living room. He sprang for the big walk-out patio and the walk-in closet and a big shower in the bathroom. He made sure the place had laundry facilities.

He admits he could have gotten a roomier two-bedroom for close to the same price. But the standard finishes just don’t feel like him.

“I know in the future a two bedroom will probably be worth more, but I don’t want to live with tile countertops and the standard oak cabinets if I don’t have to,” he says. “If anything, I feel like I’ve gotten a little more choosy now because I’m able to. People are willing to fight for my business. Normally, when I go buy a car, I just take whatever they give me. I don’t want to haggle over price or make a huge fuss. But with the condo, I go in almost every weekend and ask for the key to see the progress. I’m not afraid to ask for things like a better move-in date. If I can afford it, why not?”