Look Who’s Driving the U.S. Housing Market Millennials! What, you thought they’d stay away forever? LINK
Not very long ago, it was fashionable to ask if millennials would ever crawl out of their parents’ basements and into a realtor’s office. Enthusiasm for that view, which had gained wide exposure by 2012, lost steam as mortgages got easier to come by and millennials kept insisting that no, actually, they do want to own a home.
A flurry of reports released yesterday should further dispel the notion that millennials are allergic to homeownership.
Half of U.S. homebuyers are under 36, Zillow reports, based on a survey of 13,000 respondents, and first-time buyers account for 47 percent of purchases.1 First-timers make up 52 percent of prospective buyers planning home purchases in 2017, according to the results of another survey, published today by Realtor.com. When the company conducted the same survey last year, it found that only 33 percent of prospective buyers were first-timers.
Millennials, it seems, are poised to take a bigger share of the U.S. housing market. This is mostly a matter of basic math and common sense. First-timers have always made up a large share of home purchases, and their median age has hovered around 33. Back in the days when serious people were afraid that young people, burdened with student debt and enamored of city living, had quit on homeownership, the oldest millennials simply hadn't yet reached the age at which most Americans have historically bought their first homes.
Now, millennials are aging into the prime years for first-time homebuying, and evidence is mounting that they’re becoming the dominant force in the U.S. housing market.
Last month, the Urban Institute pointed out that mortgages to first-time homebuyers had recovered to 2001 levels, while repeat purchasers continue to do home renovations or wallow in the post-housing-crisis doldrums. (That analysis excludes cash buyers and includes boomerang buyers—foreclosure victims reentering the market—as first-timers.) Meanwhile, the credit bureau TransUnion reports that 60 percent of first-time homebuyers in the fourth quarter of 2015 were between the ages of 20 and 39. So why did anyone believe young people were done with homeownership?
In the years following the global financial crisis, which began with easy credit, it was hard to qualify for mortgages. Millennials carry more student debt than older Americans, though it's hard to say how much that keeps them from buying a home. American households are likelier to be found in rental housing than at any time in the past 50 years, and the trend away from homeownership has shown up among the young. But millennials, despite all you read about what they like and hate and will buy and won't buy, are people, and people in America have a long history of favoring the benefits conferred by homeownership—stability, price appreciation, and tax credits among them. Their biggest roadblock to homeownership may not be personal preference or personal finance. According to a recent analysis by Fannie Mae economists, a bigger obstacle is single-family landlords, who have snapped up a massive slug of starter homes in recent years, turning millennial homebuyers' likely targets into rental properties.
That may explain another finding from the Zillow survey: As a group, millennials have skipped past traditional starter homes, buying first homes that are about as large and as expensive as the homes purchased by members of older generations.
Millennials showed up in the housing market later than some people expected. Now they're making up for lost time.
Look Who’s Driving the U.S. Housing Market Millennials! What, you thought they’d stay away forever? LINK
Not very long ago, it was fashionable to ask if millennials would ever crawl out of their parents’ basements and into a realtor’s office. Enthusiasm for that view, which had gained wide exposure by 2012, lost steam as mortgages got easier to come by and millennials kept insisting that no, actually, they do want to own a home.
A flurry of reports released yesterday should further dispel the notion that millennials are allergic to homeownership.
Half of U.S. homebuyers are under 36, Zillow reports, based on a survey of 13,000 respondents, and first-time buyers account for 47 percent of purchases.1 First-timers make up 52 percent of prospective buyers planning home purchases in 2017, according to the results of another survey, published today by Realtor.com. When the company conducted the same survey last year, it found that only 33 percent of prospective buyers were first-timers.
Millennials, it seems, are poised to take a bigger share of the U.S. housing market. This is mostly a matter of basic math and common sense. First-timers have always made up a large share of home purchases, and their median age has hovered around 33. Back in the days when serious people were afraid that young people, burdened with student debt and enamored of city living, had quit on homeownership, the oldest millennials simply hadn't yet reached the age at which most Americans have historically bought their first homes.
Now, millennials are aging into the prime years for first-time homebuying, and evidence is mounting that they’re becoming the dominant force in the U.S. housing market.
Last month, the Urban Institute pointed out that mortgages to first-time homebuyers had recovered to 2001 levels, while repeat purchasers continue to do home renovations or wallow in the post-housing-crisis doldrums. (That analysis excludes cash buyers and includes boomerang buyers—foreclosure victims reentering the market—as first-timers.) Meanwhile, the credit bureau TransUnion reports that 60 percent of first-time homebuyers in the fourth quarter of 2015 were between the ages of 20 and 39. So why did anyone believe young people were done with homeownership?
In the years following the global financial crisis, which began with easy credit, it was hard to qualify for mortgages. Millennials carry more student debt than older Americans, though it's hard to say how much that keeps them from buying a home. American households are likelier to be found in rental housing than at any time in the past 50 years, and the trend away from homeownership has shown up among the young. But millennials, despite all you read about what they like and hate and will buy and won't buy, are people, and people in America have a long history of favoring the benefits conferred by homeownership—stability, price appreciation, and tax credits among them. Their biggest roadblock to homeownership may not be personal preference or personal finance. According to a recent analysis by Fannie Mae economists, a bigger obstacle is single-family landlords, who have snapped up a massive slug of starter homes in recent years, turning millennial homebuyers' likely targets into rental properties.
That may explain another finding from the Zillow survey: As a group, millennials have skipped past traditional starter homes, buying first homes that are about as large and as expensive as the homes purchased by members of older generations.
Millennials showed up in the housing market later than some people expected. Now they're making up for lost time.
No, you feared they'd stay away.
'Bears' being realists always said it was difficult for them a) to get a loan; and b) afford a loan, With all the debt hanging over their heads.
It is good to see you getting all excited-
Now we just need to work out how much debt they are comfortable taking on, after having to pay down, debt foisted upon them.
Well in 2007, with rates at 5%, they were handing out loans literally to bums on the streets.
In 2016, with rates at zero, they're giving them away to little millennial kids with $100,000 college debt like candy.
It's basic math. Bums are richer than millennials.
But with the Fed on your side, negative can become positive. Simple arithmetics. Just multiply a negative number to a negative number and it becomes positive.
Well in 2007, with rates at 5%, they were handing out loans literally to bums on the streets.
In 2016, with rates at zero, they're giving them away to little millennial kids with $100,000 college debt like candy.
It's basic math. Bums are richer than millennials.
Just remember almost half the U.S. population considers themselves as "low income" or "working class". The retail environment is shifting to "discount" or "price conscious." The U.S. is following a similar pattern to Japan.
Your explanation does a nice job of explaining what is occurring right now.
Your explanation does a nice job of explaining what is occurring right now.
Right now won't compare to a few years from now when rates go negative. They'll be handing out loans to bum millennials with 100,000 college debt like crack!
"As a group, millennials have skipped past traditional starter homes, buying first homes that are about as large and as expensive as the homes purchased by members of older generations. "
They are choosing it. We all know the lack of any price crash has driven you particularly nutty.
"As a group, millennials have skipped past traditional starter homes, buying first homes that are about as large and as expensive as the homes purchased by members of older generations. "
They are choosing it. We all know the lack of any price crash has driven you particularly nutty.
Same generation who chose useless $100,000 liberal arts degrees.
They'll have a nice foreclosure to go with their barista job.
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