Previous generations usually bought their first home as soon as they could, but it is a different story for today’s first-time buyers who often choose to wait until they are a little older before purchasing. According to an article in RisMedia, this could be down to this age group preferring the financial freedom provided by renting.
Last year the percentage of young Americans aged below 35 who owned their own home dropped to just 36%, which is the lowest on record. This drop is significant as the millennials represent the largest demographic group in the United States, and their attitude towards purchasing their own house is holding back the housing recovery. The numbers of millennials far outnumber baby boomers, but even as they begin to approach the peak years for buying a home, sales of homes typically purchased by first0time buyers are falling. Experts point out that millennials will have a huge impact on the housing market in the United States, and in turn a huge effect on the economy.
The second most affordable housing market in the country last year was the Twin Cities, with a combination of high wages and low house prices. This has led to a large influx of younger house buyers into the area. Apparently more than a quarter of those who are new to the area are aged between twenty and thirty four, and this age group is very well-informed when it comes to buying their first home. They have already done a lot of research on the Internet, and have a very clear picture about the type of property they require. Many want larger kitchens and living areas for socializing, and will prioritize this above the size of the bedrooms. Overall they want a nicer home than previous generations, and are prepared to spend some time searching for it.
Although home-ownership rates are falling amongst millennials, it doesn’t mean they have given up on the idea of purchasing their own home. Most are simply delaying, and job security can be a huge factor. Young people are unwilling to commit to a mortgage if there is a chance they may need to move for work, possibly to another city. Ultimately it is expected this age group will make an impact on the housing market, in the same way they have affected the rental market. More than 90% of millennials expect to eventually buy, but not all are convinced of the need to settle down and to try to build equity in a property.