Tag Archives: Millennials

A ClosingCorp survey of more than 1,000 adults found that about 2 in 3 adults age 18-34, who plan to buy a home know nothing about closing costs. The survey also found that across all age groups, more than one-third of potential homeowners are “not very” or “not at all” aware of closing costs.

The median age of millennial homebuyers was 29, their median income was $76,900 and they typically bought a 1,720-square foot home costing $189,900. The typical Gen X buyer was 41 years old, had a median income of $104,600 and purchased a 1,890-square foot home costing $250,000. When asked about the primary reason for purchasing a home, a desire to own a home of their own was highest among Millennials at 39 percent. Younger boomers were the most likely to buy because of a job-related relocation or move, and a change in a family situation, most likely the birth of a child, was the highest among Gen X buyers.

Today, cities resemble a “new donut” pattern with a resurgence of downtown and historic centers, often driven by young adults. Young adult, ages 22 to 34, population has grown in every city in the country. This Millennial population has been shown to be interested in neighborhoods with walkability, and less interested in having a home with a big back yard or close to a good school district. Residents in the center of cities now tend to have a higher level of education than before, with new college grads moving to metropolitan areas. This influx of new residents has created a resurgence of development in cities.

Student loan debt, a slow lag in finding employment, and wage stagnation were cited as some of the reasons why millennials have yet to enter the housing market in record numbers. About 70 percent of students walked away with loan debt in 2013 and the average student racks up almost $30,000 in debt by graduation, according to an annual report on loan debt released by the Institute for College Access and Success.

When it comes to major life milestones, mortgages come before marriages for a large number of millennials, according to data released Friday. In a recent survey conducted by Redfin, 38 percent of Americans age 18–34 say they either would or have put off a wedding or honeymoon in favor of saving to buy a home.

Employment grew at a rate higher than the national average (3 percent, as opposed to 2 percent) for the 25 to 29 age group, which is good news for housing, because this age group is the key first-time homebuyer segment. Steadily falling oil prices, which are down 45 percent since June, provide more economic growth tailwind going into next year. The drop in oil prices reduces energy-related expenses not just for driving, but for residential real estate also, according to Khater.

In his 2015 outlook, Zillow's chief economist, Dr. Stan Humphries, predicts millennials will take on a much greater presence in the housing market, overtaking Generation X as the largest group of homebuyers.

Despite concerns about their current presence, millennials still have a major role to play in shaping the housing market in the coming years, researchers assert in a new report from the Demand Institute (TDI). Based on an analysis of economic and consumer research over the last 18 months, TDI predicts the number of households headed by millennials will reach 21.6 million by 2018, representing an increase of 8.3 million since 2013.

RealtyTrac's latest report on housing affordability shows that 96 percent of U.S. housing markets are still affordable for recent graduates making the median household income, even those with student loans. RealtyTrac found that the minimum amount of income needed to purchase a median-priced home, with and without student loans, was feasible in 475 out of 494 counties with a population of at least 100,000.

According to Zillow's latest Negative Equity Report, high negative equity among Gen-X homeowners is causing gridlock in the U.S. housing market. Nearly 43 percent of homeowners between 35 and 49 are underwater on their mortgages. In contrast, only 15 percent of millennial homeowners (those between 20 and 34 years old) and 31 percent of baby boomers (50 to 64 years old) are underwater.