Are Millenials engaged in the American dream?
Is it true that the Millenial generation as a whole is not entering the world of home buying? Maybe not.
There are dozens of articles being written almost daily about the Millenial generation and home ownership. Most of these articles say that Millenials want to buy but are unable. Several factors are cited - inability to save for a down payment (rents are too high to allow savings to occur), high student debt, and fear stemming from the Great Recession of a decade ago are just a few. Yet, the statistics don't reflect this belief that Millenials aren't buying homes.
Recently a study was conducted by the National Association of Realtors (NAR), called the Home Buyer and Seller Generational Trends study. The study concluded that 35% of buyers in the time surveyed were 35 years old or younger. This was the largest group of home buyers. While it is also true that a greater percentage of people are waiting to purchase their first home - we are seeing the highest rate of people still living with their parents into their 20's and 30's than ever before - the fact remains that Millenials are buying.
The same NAR report also said that Millenials are choosing not to live in the urban areas as many thought they would, but rather in the suburbs. They are buying older homes in the suburbs for two main reasons - they can't find a home to buy in the urban areas and they are looking for homes large enough to start a family. Remember as recently as 20-15 years ago, when first time buyers bought a 2 bedroom condo and then purchased the home in the suburbs as their move-up home? This isn't happening nearly as much as it did then, because as a whole the first time buyer population is waiting longer to buy.
The Millenial generation is extremely important for the overall health of the real estate market. Generally speaking, they are the ones who will purchase their first homes which will allow those home sellers to purchase their move-up home, and so it goes along the chain. Without the first time buyer, inventory will remain low and the market will not see the sales volume that it could. This is the critical question - how do we keep Millenials engaged in the American dream? Keeping interest rates low will help, but also preventing new barriers the could potentially block entry into the marketplace for this generation is key.
Are you a Millenial thinking of buying your first home? I would love to hear from you and find out your thoughts on the subject.
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