Undeterred by Debt and a Tighter Housing Market, Young Buyers Are Forging Ahead With More and More Home Purchases
Although some single-family markets are turning in favor of homebuyers, much of the housing across the U.S. remains tightly contested. Low inventory means more people are fighting for fewer homes and driving up costs.
However, recent statistics from the National Association of Realtors (NAR) suggest that one group is charging ahead in the uncertain market — millennials-especially in Tech Heavy markets like Austin, Portland and Silicon Valley. According to the numbers, the median age of a first-time home buyer is currently 32.
First-timers were active in the market as well, representing almost half of all new home mortgages based on Freddie Mac data from the first quarter in 2018.
Even though they face the additional hurdle of increasing debt from both student loans and credit cards, millennials have encountered little resistance to borrowing for a new home purchase. Some of the optimism is buoyed by a healthier job market, although other motivations may be based on more practical concerns. While rent prices in certain major cities are falling, the cost of renting remains a heavy burden, particularly in tech-heavy corridors, like San Francisco or Austin.
Millennials may be viewing this moment in time as their best opportunity to get into a home before costs become too exorbitant. Their impact on the market is also attributable to their volume. The millennial generation is set to become the largest demographic group by the year 2020.
Some other interesting notes from the NAR report show that the household income of the first-time buyer was $75,000 compared to $97,000 for that of repeat buyers.
There also was data to suggest that many of the first-time purchases were single-family homes in predominantly suburban areas. This finding is a surprising twist on the prevailing theory that younger generations prefer urban environments, eschewing the traditional neighborhoods of their parents.
Even if they don’t all aim for the bedroom community, it’s clear that millennials as a whole are seeking their piece of the American dream.
