Are Millennials The Key To Future Housing Demand?
Are Millennials The Key To Future Housing Demand?September 13th, 2018
Housing demand has been taking some hits lately due to rising home prices, higher interest rates and, lack of affordable inventory.
Millennials May Be Key to Housing Market
But even with lingering student loan debt, millennials may be the key to where it goes in the near future. CNBC ran a report that we may be on the edge of “an absolute perfect storm for demand” thanks to millennials, and they may be the force that tips the scales of home buying.
Millennial Buyers Exceed Generation X and Baby Boomers
The percentage of millennials who say they’re actively seeking to purchase a home is now exceeding Generation X and the baby boomers. Millennials have broadly been later to marry and have children, and similarly late to home ownership. But as the job market strengthens and they begin families, they’ve become a massive population who are saying loudly that they want to become homeowners too.
Homeownership is the Next Logical Choice
For older millennials (aged 25-34) who have established themselves in their career and are starting to build their families, homeownership is the next logical choice.
According to the Urban Institute’s State of Millennial Housing, the probability of a millennial becoming a homeowner increases by 17.9% if they are married, and by an additional 6.2% if they have children.
Last year, according to the US Census Bureau, the average age at first marriage was 30 for men and 27 for women. The National Association of Realtors (NAR) reports that the average first-time homebuyer was 32 years old.
With most of this generation having yet to age into the ‘Responsibility Zone’ (the time in their lives when their responsibilities start to dictate their behaviors), there will be a steady wave of buyers for years to come!
Limited Inventory Has Been A Challenge
Those who are currently out in the market searching for a home are being met with a strong, highly competitive seller’s market. NAR’s Chief Economist Lawrence Yun recently commented,
“Realtors® throughout the country continue to stress that there’s considerable pent-up demand for buying a home among the millennial households in their market.
Unfortunately, they’re just not making meaningful ground, and continue to be held back by too few choices in their price range, and thereby missing out on homeownership and wealth gains.”
If you are currently renting and thinking about jumping into the real estate market, let’s get together to help you navigate our market.