The millennial generation is one that the real estate and mortgage industries are watching closely, and with good reason. This is the generation of people that have recently entered the stage of life most commonly associated with buying a first home – the late 20s to early 30s and for the third year in a row, they are the largest group of recent home buyers, making up 35 percent of all buyers in the United States.
But unlike many of the generations before them, millennials have been going against historic trends. They are waiting longer to buy homes, perhaps due to the aftershock of the economic crisis, and some were even choosing to purchase an investment property before buying their primary residence. However, there is one trend among millennials that seems to be more in-line with what their parents did. Instead of opting for a chic urban pad, more and more Gen Y home buyers are heading for the suburbs.
According to the 2016 National Association of Realtors® Home Buyer and Seller Generational Trends study which evaluates the generational differences of recent home buyers and sellers, the share of millennials buying in an urban or central city area decreased to 17 percent this year from 21 percent in 2015. Additionally, fewer of them (10 percent) purchased a multifamily home compared to a year ago (15 percent).
Lawrence Yun, chief economist for the National Association of Realtors® (NAR) says that while millennials may choose to live in an urban area as renters, the survey reveals that most do not desire to stay once they’re ready to buy.
“The median age of a millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” said Yun. “Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out.”
Yun adds, “Furthermore, limited inventory in millennials’ price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households.”
Photography by [Захар Гончаров] © 123RF.com
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