Millennial Home Buying: A New Generation Taking Over Real Estate
As the smoke clears from a tumultuous real estate market, Millennial home buying takes center stage. After years becoming the dominating majority of the workforce, Millennials make up the largest percentage of home buyers in the US.
According to the National Association of Realtors (NAR), younger millennials (23-31 years old) and older millennials (32-41) continued to carve out a larger piece of the homebuying pie. Worth noting, Millennials reflect 43% of all homebuyers (many as first-time homebuyers). Now, this represents the largest real estate market portion of any generation, up 6% from last year.
The Millennial Home Buying Dilemma
Over the years, many condescendingly viewed Millennials as ‘Generation Rent’. With many Millennials listing debt and student loans as obstacles to home buying, they waited much longer the preceding generations. However, the rise of Millennial home buying led ways to creative methods to becoming homeowners.
Millennials face unique challenges compared to prior generations, specifically when it comes to debt—Millennials carry over a trillion dollars of it. Overall, the Millennial debt-to-income ratio prevented many from saving up for the traditional 20% down payment. Ironically, the rising trend of rental bidding wars make owning a much more affordable long-term option.
Looking Towards the Future of Real Estate
Representing the largest generation in human history, Millennials most major life milestones (children, homebuying, etc.) back to pursue more education and professional advancement. However, that trend shifts as they grow older and accumulate greater wealth.
Despite the shift, Millennial home buying faces limited housing inventory and affordability challenges in the years to come. According to First American’s Homeownership Progress Index (HPRI) (First American is an underwriter of Lee Scott Perres, P.C.), declining affordability may stall home buying efforts for the rest of 2022.
Despite these hurdles, Millennials fuel faith in the real estate market and may lead to better conditions for Generation Z down the road. For legal guidance with Illinois real estate transactions, contact the attorney at Lee Scott Perres, P.C.
