According to a recent report from the National Association of Realtors, first time home buyers are taking an increasing share of the market compared to the last two years. In 2016 35% of home sales are from first time home buyers with 61% of them under the age of 35. This number is the highest since 2013 and hit its peak at 50% in 2010. According to a report by The Dallas Morning News, we should expect this trend to continue:
“Young adults are settling down and deciding to buy a home after what was likely a turbulent beginning to their adult life and career following the Great Recession,” said Lawrence Yun, top economist for the National Association of Realtors. “Demand increased over the past year because of a robust job market for those with a college degree and renter fatigue at a time when homeowners continue to see their equity rise.
“Even with the affordability challenges many buyers face, the allure of homeownership is not lost among the younger generation,” he said. “Those under age 35 made up 61 percent of first-time buyer transactions.”
The number of first-time buyers is at last rebounding after shrinking during the economic downturn.
This year, the nationwide share of first-time home buyers was 35 percent – up three percentage points from 2015, the Realtors’ association found. The share of first-time buyers had fallen to the lowest level in almost three decades during the recession.
Also according to the report, the average home buyer is mid 40’s with a near six figure household income, but the millennial numbers increasing is vital to the long term real estate market growth.
In fact, according to an article in Housing Wire about a Zillow survey, the younger generation is shifting the way home buying is done. Mainly they use online resources to determine the best mortgage rates, home prices, and other pertinent factors as opposed to the old school approach of ‘boots on the ground’ research:
“We knew the Millennial generation was playing an increasingly large role in the housing market,” Zillow Chief Economist Svenja Gudell said. “But this consumer research allows us to get a fascinating, behind-the-scenes look at how their expectations and approach are playing out in the housing market.”
“These young adults came of age during a recession, but they are buying their first homes in a high-priced and fast-paced market,” Gudell said. “They’re using every available resource, including online research and real estate professionals, and taking on the challenge with gusto.”