Dive Brief:
- Millennials, aged 25 to 34, are 70% more likely than the average adult to be currently looking for a home to buy on Realtor.com, and almost 65% of millennials aged 21 to 34 looked at real estate websites and apps in August, according to Realtor.com Chief Economist Jonathan Smoke.
- A June-July realtor.com survey of active home shoppers, aged 25 to 34, revealed the factors most likely to trigger entry into the homebuying market were an increase in income (35%), being tired of a current home (34%), and favorable home prices (32%). The biggest impediments to entry were limited supply (40%), affordable supply (37%) and being new to the market (36%).
- The Realtor.com statistics and Smoke’s analysis contradict the commonly accepted theory that the number of renters will continue to increase and that millennials are not as interested in home ownership as other demographic groups.
Dive Insight:
Millennials are no different from previous homebuying generations, Smoke said, but it’s possible they have delayed homeownership for a few more years than their predecessors. Smoke said millennials entered the job market during "one of the largest recessions of all time" and are struggling to acquire the credit and down payment required to purchase a home.
Smoke’s opinion is buoyed by an August National Association of Realtors report that found the market share of first-time homebuyers increased 4%, despite a 4.8% decrease in total existing home sales nationwide.
In addition, Lennar, the second largest homebuilder in the U.S., reported first-time buyers accounted for 30% of their sales in the third quarter of 2015, up 5% from the previous year.
"As inventory returns to more normal levels," Smoke said, "expect the blooming of millennial home buyers to turn into a boom."
For that transition to occur, experts have encouraged builders to focus on creating inventory for entry-level buyers, as affordable homes are currently in limited supply.
