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Online search activity points to a growing interest among young adults to find housing, but national trends show the market remains ill-suited to meet their needs.
In a report earlier this week, online listings site Realtor.com observed a largely steady trend line in housing market indicators in August, with prices leveling out from month to month and limited inventory dipping slightly.
According to the company median list prices in August were unmoved from July at $214,900—up 7.5 percent from last year. Available listings, meanwhile, were down to an estimated 1.9 million, down 2.47 percent from July and 1.13 percent from last year as insufficient home equity and an uncertain economic outlook hold homeowners back from selling.
On the buying side, demand remained steady. The median age of inventory in August was 86 days, according to Realtor.com, down 6.5 percent from August 2013 but up 4.9 percent from July as the usually busy selling season drew to an end.
Demand was most evident among the country's millennial population, half of whom visited real estate websites throughout the month, Realtor.com reported. However, with relatively few homes on the market, prices pushing upward, and lending standards still tight, few in that group have been able to make the jump to homeownership.
The younger age group also brings some of its own unique challenges.
"Millennials were hit the hardest by recession layoffs and job shortages, and many are still facing the financial aftermath of the downturn including reduced wages and depleted savings," said Jonathan Smoke, chief economist for Realtor.com. "Monthly mortgage affordability and 20 percent down payments have become especially difficult as home prices increase."
While the national picture looks unwelcoming for a young consumer trying to get into the market, Realtor.com says a few markets are "primed and ready" for millennial homebuyers as fall approaches. Those markets include a number of locales in the Northeast and Midwest, including Akron, Ohio; Buffalo-Niagara Falls, New York; Indianapolis, Indiana; Syracuse, New York; and Peoria-Pekin, Illinois.
All of the markets included in Realtor.com's list have two things in common, the company said: better than average affordability (as measured by the National Association of Realtors) and rising inventory numbers.
"The neighborhoods on our list offer plenty of opportunity for millennials looking to get into the market in the next few months. Not only are first timers more likely to be able to afford homes in these areas, less competition in these markets means they are more likely to have their offers accepted," Smoke said.
Meanwhile, there is one trend happening at the national level that works out in millennials' favor. According to the latest existing-home sales data from the National Association of Realtors, sales made to investors fell to a 12 percent share, the lowest the group has seen in nearly five years.
"For first-time home buyers this means reduced competition and less all-cash offers in the marketplace," said Chief Economist Lawrence Yun.
