Millennial buying habits impact housing market
Posted on Friday, August 1, 2014 at 10:22:18 AM
When it comes to residential financing and homeownership, one demographic is often on the outside looking in: millennials.
This generation is considered those born from the early 1980s to the 2000s, or the primary group of people currently graduating college and getting full-time jobs. While this segment should be driving the housing market, rising debt has kept many people sidelined.
According to Zillow, the national homeownership rate ticked down in the second quarter of 2014, with potential future declines likely due to a lack of millennial buyers. The average age of first-time homebuyers is also on the rise, signaling that fewer millennials are entering the market.
"A lower homeownership rate because of these demographic shifts will have a ripple effect, keeping rents high and potentially impacting the broader economy if substantially fewer people pay property taxes and buy fewer home goods," explained Zillow chief economist Stan Humphries.
In addition, the National Association of Realtors reported that millennials that do buy are looking in a few specific areas. Top markets for this demographic include Austin, Texas and Dallas, as well as Denver, New Orleans and Seattle, among others.
While finding a home is certainly a possibility, millennials are limited by student loans, flat wage growth and a lack of employment opportunities, NAR chief economist Lawrence Yun stated.