The Millennial Generation
Despite an uncertain future, the Millennial generation – those 32 years old and younger – have more optimism and confidence about their recent home purchase than any other age group.
According to a recent National Association of Realtors® study that evaluated the generational differences of recent home buyers and sellers, 85 percent of buyers under age 32 believe their home purchase was a good financial investment. That is compared to just 50 percent of buyers ages 88 and older.
The oldest of the Millennial generation are starting to buy their first home. They understand that homeownership is one way to accumulate wealth, especially for younger families in today’s world. Currently, they might be facing an uncertain job market, mounting debt, and tighter mortgage lending rules, yet homeownership still matters to them, and they still aspire to one day become homeowners.
The study found that 79 percent of Millennials were first-time home buyers and 65 percent of them previously rented a home. Half of respondents said the reason for buying a home was their desire to own a home of their own. Twenty-two percent said the affordability of homes made them want to purchase. The Millennial generation is also the second largest group of recent buyers, accounting for 28 percent of recent purchases. They follow Generation X, those born between 1965 and 1979, who made up 31 percent of recent purchases.
The Millennial generation is the largest in history after the baby boomers and they are expected to give the housing market a boost. However, there are some significant challenges that might hinder their ability to purchase homes. Buyers with student loan debt may find it difficult to access mortgage credit, as well as save for a down payment.
The impact of student loan debt is a concern for future generations and their ability to become home owners, since those burdened with growing monthly debt payments will have restricted access to mortgage credit and could find it harder to save for a down payment.
The Greater Louisville Association of REALTORS (GLAR) agrees today’s young home buyers are facing challenges, yet those hurdles aren’t changing younger buyers’ attitudes about homeownership. There is still tremendous affordability in the market and interest rates are still low. Today’s market presents opportunities for young buyers to own a home and they recognize that. Realtors® are committed to making sure those who are willing and able to own a home have the opportunity to do so. Everyone should have the ability to pursue the dream of homeownership.