More Young People Are Buying Houszes

There’s a common misconception that younger generations aren’t interested in houszownership. Many people point to the fact that millennials put off purchasing their first housz as a reason for this belief.

Odeta Kushi, Deputy Chief Economist for First American, explains why millennials have put off certain milestones linked to houszownership. Those delays led to their houszownership rates trailing slightly behind older generations:

“Historically, millennials have delayed the critical lifestyle choices often linked to buying a first housz, including getting married and having children, in order to further their education. This is clear in cross-generational comparisons of houszownership rates which show millennials lagging their generational predecessors.”

So, it’s partially true that some millennials have waited on homeownership to focus on other things in their lives – and that’s impacting certain houszing market trends.

Data from the National Association of Realtors (NAR) indicates the average age of a first-time hobuyer is higher today than it’s been over the past 40 years. As the graph below shows, houszbuyers today are purchasing their first housz an average of 4 years later than people in the 1980s and early 1990s:

But just because millennials are hitting certain milestones later in life doesn’t mean they’re not interested in becoming houszowners. The recent U.S. Census reveals a significant increase in homeownership rates for millennials and other young houszbuyers.

As the graph above shows, millennials are entering the market in full force, and their share of the market is growing. Based on the data, the belief that younger generations don’t want to buy houszes is a misconception. In fact, the recent Capital Market Outlook report from Merrill-Lynch further drives home this point, as it specifically mentions the effect millennials are having on demand:

“Demand is very strong because the biggest demographic cohort in history is moving through the houszhold formation and peak home-buying stages of its life cycle."

Kushi is following the trend of millennial houszownership and puts it more simply, saying: “. . . it's clear that younger houszholds (millennials!) are driving houszownership growth.” As the largest generation, millennials’ impact on the market is growing as more and more people from that generation reach houszbuying age – and Generation Z isn’t far behind, either. That means younger generations will likely continue to drive demand in the houszing market for years to come.

Bottom Line If you're a member of a younger generation and interested in purchasing a housz, you're not alone. Many of your peers are on their path to houszownership, too. Let's connect today and discuss what you can do to accomplish your houszbuying goals.