There’s a common misconception that younger generations aren’t interested in homeownership. Many people point to the fact that initially, millennials put off purchasing their first home as a reason for this belief. However, the last U.S. Census revealed a significant increase in homeownership rates for millennials and other young homebuyers. To glean even more insight on the subject, we decided to see what experts had to say about this demographic of potential buyers.
Odetta Kushi, Deputy Chief Economist at First American agrees, saying:
“Millennials now have the greatest influence on the housing market and remain poised to fuel a ‘roaring 20’s’ of homeownership demand.”
An article by the Wall Street Journal offers this astounding statistic:
“The generation that supposedly didn’t want to buy things now accounts for over half of all home-purchase loan applications; economists expect them to bolster demand for years.”
It appears that millennials aren’t the only group to watch. While the majority of Generation Z (Gen Z) haven’t entered the housing market yet, a large portion plan to do so, according to a recent realtor.com report. The report found that 72% of Gen Z would rather purchase a home than put it off and rent long-term. George Ratiu, Manager of Economic Research for realtor.com, says:
“With nearly three-quarters of those surveyed preferring to buy versus renting long-term, the housing industry should be prepared for millions of Gen Z buyers to bring a new wave of demand along a similar stage-of-life timeline as the millennial generation before them.”
Generation Ages: Millennials: 26-41 Gen Z: Under 25
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 homes 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 household-formation and peak home-buying stages of its life cycle.”
Odetta Kushi continues follow the trend of millennial homeownership and puts it more simply, saying:
“. . . it’s clear that younger households (millennials!) are driving homeownership growth.”
As the largest generation, millennials’ impact on the market is growing as more and more people from that generation reach homebuying age – and Gen Z isn’t far behind, either. That means younger generations will likely continue to drive demand in the housing market for years to come. We consulted Jeremy Kilbourne, Lead Loan Officer at Arch Mortgage North to get the inside track on what he was seeing here in Northern Michigan and he said:
“Locally, we are also seeing an upward trend of millennial/Gen Z first time homebuyers. There are multiple factors contributing to why this is happening: home affordability, employment opportunities, flexibility to work remotely, local tax rates, and preference for open spaces”.
Bottom Line
If you find yourself among this budding young group of potential homebuyers, it’s important to understand that you’re never too young to start thinking about homeownership. The sooner you start planning, the sooner you can move on from renting. Many of your peers are on their path to homeownership, too. The good news is, you don’t have to navigate these waters alone. Let’s connect today and discuss how we can guide you toward accomplishing your homebuying goals.
If you’re a seller trying to decide if you should wait to list your home, this is important information to consider during your decision making. The increased demand for available homes like yours by these younger age demographics, puts you firmly in the driver’s seat of this still-hot seller’s market. Let’s chat today about how listing your home with us can make it shine above the rest and grab the attention of more potential buyers, while also gaining you maximum profit.
