Survey Gauges Millennials Optimism about Entering Housing Market

Millennials have become more positive when it comes purchasing their first home and are primed to gain market share in the second half of the year, based on the results of Realtor.com’s Consumer Behavior Survey. Realtor.com, a leading provider of online real estate services operated by News Corp subsidiary Move, Inc., surveyed more than 12,000 respondents from January 1, 2015 to June 15, 2015.

Johnathan Smoke, Realtor.com’s chief economist gave an in-depth review of the survey findings at the Mortgage Availability for Millennials and Other First-Time Buyers panel discussion at the National Association of Real Estate Editors conference in Miami on Wednesday.

“Despite the slow indicators we saw earlier this year, 2015 is on pace to be one of the best years for housing since 2006 due to strong sales and higher than predicted home prices,” said Smoke. “Additionally, we’re observing an uptick in millennial traffic and sentiment that we expect will result in more first-time home buyer sales in the later part of the year.”

First-timers are very critical and cautious when it comes to the health of the market, Smoke added. “Historically, they’re the largest demographic of home buyers and can have a dramatic impact on housing,” he said.

The next piece of revealing data comes from the number of millennials who intend to buy a home within the next three months. Relator.com found that 65 percent of the survey respondents indicated that they intend to buy a home within three months, up from 54 percent in January. Older millennials and first-time buyers are also optimistic about purchasing a home. Both groups noted in the survey that they are “very likely to purchase within the next 12 months,” compared to the average buyer.

Market challenges and lack of inventory held many millennials back from buying a home in the beginning of this year. In the survey, 41 percent of older millennial homebuyers cited that they “have not yet found a house that meets their needs” as the biggest factor holding them back from a purchase. Some of the other reasons mentioned included difficulty finding a good house within budget, not spending enough time looking, needing to improve credit score, lacking a down payment, and currently being in a lease.

“Last year, first-time buyer market share decreased as the year progressed and dropped all the way to 27 percent in the summer, according to data from the National Association of Realtors,” stated Smoke. “This year, we’re seeing an increase in millennial demand that points to a strengthening first-time buyer demographic. As the economy continues to grow over the next few years, we can expect first-timers to return to a healthy level of 40 percent of the market. A return to that level would add approximately 15 percent to the number of total homes sold.”