Younger home buyers aged in their 20s and 30s, who were once seen as being reluctant to enter the housing market, are now driving its recovery during the COVID-19 pandemic, according to the Wall Street Journal.
Even before the pandemic began, so-called millennials were starting to increase their home buying activity, accounting for more than half of all new home loans last year. And younger buyers have remained just as active in the first few months of this year too, according to the Journal, which cites data from realtor.com.
The large size of the millennial generation has led to predictions that they’ll have a lasting impact on the housing market. Millennials are now the largest living generation in the U.S., having surpassed baby boomers, according to data from Pew Research Center. The largest segment of millennial births occurred in 1990, and people born in that year are just turning 30 now.
“We anticipate as they turn 31 and 32, we’ll just see homebuying demand grow,” Odeta Kushi, deputy chief economist at First American Financial Corp., told the Journal.
First American is forecasting millennials to buy as many as 15 million homes in the next 10 years.
Existing-home sales surged nearly 25% in July, reaching their highest seasonally adjusted annual rate since December 2006, according to the National Association of Realtors. First-time buyers comprised 34% of sales in July, up from 32% a year earlier.
The pandemic and low interest rates - currently under 3% - are also serving as an incentive for young adults to finally buy, experts say.
“Millennials, they’re roaring into home buying age,” Rick Arvielo, chief executive of mortgage lender New American Funding, told the Journal. “What the industry’s been talking about for a decade is whether they’re going to follow their predecessor generations in terms of their desire to own homes. … They have the same desires.”