What to Know About Millennials in Real Estate, with Emilio DiSpirito
Why is buying homes? The generational market segments and what they mean with a strong focus on Millennials.
The real estate market is extremely hot right now. Prices are going up due to a stronger economy being able to handle them, however also due to the demand and lack of supply. Let’s take a closer look at why we have a shortage of homes and who is buying and selling in today’s market.
Who is Buying Homes?
- Millennials ages 38 and under make up 36% of all home buyers
- Generation X ages 39 to 53 make up 28% of all home buyers
- Baby Boomers broken up into 2 segments for a total of 30%
- Baby Boomers 54 to 63 make up 16%
- Baby Boomers 64 to 72 make up 14%
- The Silent Generation ages 73 to 93 make up 6% of home buyers
Let’s take a closer look at our largest demographic of buyers – the Millennials.
Millennial Home Buyers (Born Between 1980 to 2000)
One out of every three homes sold in 2018 were sold to a millennial home buyer. In fact, 36% of the market right now is dominated by these buyers which range in age of 38 and younger. This number is up 1% over 2017 and looks to increase in size according to Barry Habib, Housing Economist with MBS Highway, over the course of the next 7 years as the population of able millennial home buyers continues to grow like a staircase.
What do we know about Millennials? Despite what you think, they tend to be on the more traditional size of purchasing patterns and the “American Way of Life.” Here are some great statistics according to TransUnion:
- 9 out of 10 millennials want to own their own home at some point
- 33% of all millennials wish to purchase a home in the next year
- 75% believe owning a home makes financial sense and protects them from rent increases and is a great long term investment
Are Millennials Ready to Own Homes?
- 57% have worthy credit scores while 43% have subprime credit scores
- What Do Millennials Worry About the Most When Buying a Home?
- Low credit scores
- Not having enough of a down payment on a home
- Qualifying for Low-Interest Mortgage Rates
Challenges for Millennials – Low Available Assets.
- The average closing cost is $10,792 nationally
- 3.5% down payment is needed in most cases ($8,750 on a $250,000 home)
- 63% of renters do not have enough liquid assets to buy homes
- 35% of current Millennial homeowners do not have enough equity in their home to buy up
- 65% of Millennial homeowners have enough equity in a home to place a larger down payment
How Have Times and Circumstances Changed Since Last Year for the Millennial Home Buyers Since 2017?
- The median household income is up in 2018 $6,000 or 7% over 2017 from $82,000 to $88,000 per year.
- A $205,000 home purchase price is up 7% to $220,000 in 2018 over 2017.
- The median rent price is $1,445 across the country and up 3% in 2017 over 2016 making homeownership a sensible purchase.
- 15% bought in urban areas down from 21% in 2016.
- Millennials are looking for communities with a mix of suburban and urban features.
For More Information
If you are interested in buying or selling a home, or would like to contact Emilio directly, visit: www.MyDreamHomeNow.com to learn more.