More and more millennials are buying houses. In fact, they comprise 43% of current home buyers. That makes them the largest population in the real estate market in the United States! According to the National Association of Realtors, there is a significant increase in millennial home buyers. Moreover, they are the generation who use social media to look for homes and hire real estate agents.
With this year’s inflation and the shortage in housing, this could be bad news for the younger generation. However, despite withdrawing from buying now, the determination to acquire their dream homes in the next two years is fierce. In addition, 9 out of 10 from Gen Z said they want a house in the future.
Thus, even with today’s tough market, the younger generation still looks forward to being a homeowner. As they say, it is a part of the American dream. Now, the question is, will they be able to purchase their forever home in the current housing market?
The Housing Market in 2023
The continuous increase in the price of houses is the result of the limited supply in the market. Even with an increase in the listings, it still isn’t enough. Active inventory is down 38% compared to those in 2017-2019. Thus, expect a tight inventory environment in the next five to seven years. However, this doesn’t pose much of a problem. Buyer competition is not an obstacle for millennial home buyers. As a matter of fact, only 28% said that it is a factor in deciding to purchase a home. That’s lower compared to last year’s 59%.
However, with the mortgage rates dropping, millennials gain a clearer picture of acquiring their dream home. Moreover, the Federal Reserve is easing its rate hikes. Thus, expect mortgage rates to fall even more. A downward trend in interest rates makes houses more affordable for younger buyers. Who doesn’t want to spend less on something they’ve been wanting? That’s good news, isn’t it? But as much as millennials rejoice due to the houses’ affordability, it also means more competition. Although, this doesn’t stop them.
Millennials in the Changing Housing Market
Roughly between the ages of 23-41, this generation continues to put a mark on the U.S. economy. Growing up in a time of a rapid rise in technology, millennials find ways to stay on top of the trends. Moreover, they learn to innovate quickly and use available resources. Due to this, it is easier for them to know what they want and how they can acquire it. Thus, it is no wonder they aren’t afraid to break barriers. As they make up the largest share of home buyers in the U.S., it is safe to say that they are the key to the stability of the current housing market.
Being first-time homeowners, reports show younger millennials (ages 23 to 31) comprise 81% while older millennials (ages 32 to 41) comprise 48%. Bankrate’s survey revealed that over half of the older millennials think it’s challenging to afford the downpayment. Meanwhile, almost half of the younger millennials said that not having enough income is a hurdle in purchasing a home. However, despite uncertain economic conditions and high student debts, this generation seems to have their dream of being a homeowner set in stone. In fact, according to a report from the National Association of Realtors, 86% of buyers said that they view a home purchase as a good investment.
The Hunger to Buy a Home
A survey conducted by Forbes showed that 23% of millennials would purchase a home without seeing it first. That’s a significant difference compared to the older generations. Only 16% of Gen X and 5% of Baby Boomers would consider buying a house without seeing it in person. Moreover, 55% of the younger generation are willing to purchase an auction property. Thus, millennials’ real estate habits prove they have a keen sense of opportunity. They see potential and are happy to dive into it. Lastly, they successfully navigate the complex real estate market because of their calculated actions.
Digitizing the Home-Buying Experience
Due to the influence of millennials, today’s real estate market adjusts to cater to this generation. It opens a new dimension in the home-buying process. There is a desire to provide a positive experience, especially for this generation. It resulted in the rise of virtual tours, digital appraisal scheduling, virtual inspections, and digital closings. Thus, there is no denying how these are excellent opportunities to infuse more technology into the traditional real estate market. Not only that, but it also increases transparency, something that millennials put high on their priority list.
The Bottom Line
Overall, millennials are driving the housing market in 2023. Due to their large number, plus their desire to buy a home, they make an impact. They are the reason for a positive change and the key to the market’s stability. Their tech-savviness makes way for innovation. Due to their hunger to achieve their home goals, they find ways to reach them. Thus, wanting something is possible when the mind is set for it.
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