Millenials Confident Home Purchase is a Great Financial Investment
Millennials are more confident than any other age group that their recent home purchase was a good financial investment, according to a new study released this week by the 2014 National Association of Realtors® Home Buyer and Seller Generational Trends. This generation, also known as, Generation Y remain optimistic and see their home as a good investment, while older buyers are more likely to trade down to a smaller property to match changing lifestyles. This study evaluates the generational differences of recent home buyers and sellers, and found that while 8 out of 10 recent buyers considered their home purchase a good financial investment, ranging from 87% for buyers age 33 and younger, to 74% for buyers 68 and older
This study consists of a compilation of survey data from 8,501 recent home buyers, and also shows that 80% of buyers who are aged 57 and younger bought a detached single-family home in 2012. Buyers over the age of 57 are purchasing townhouses and condos more often. The report also found that among all generations of home buyers, the first step in the home buying process is looking for properties for sale online. Older buyers are less likely to finance their home purchase in comparison to younger buyers; when they do finance, the share of the home they financed is typically smaller.
Survey respondents noted benefits from working with a real estate professional. Among age groups, younger buyers are more likely to want their agent to help them understand the process as they are more likely to have never purchased a home before. Additionally, younger sellers are more likely to use the same real estate agent or broker for their future home purchases than older sellers.
“Homeownership is an investment in your future, and is how many younger American families begin to accumulate wealth,” says Paul Bishop, NAR vice president of research. “The oldest of the Millennial generation are now entering the years in which people typically buy a first home, and despite the recent downturn, homeownership still matters to them. The sheer size of the Millennial generation, the largest in history after baby boomers, is expected to give a powerful boost to long-run housing demand, though in the short-term, mortgage accessibility and student debt repayment remain challenges.”
The study found that the largest group of recent buyers was Generation X Americans, those born between 1965 and 1979, who comprised 31 percent of recent purchases, followed closely by Millennials, sometimes called Generation Y, those born between 1980 and 2000, at 28 percent. Percentages of recent home purchases among prior generations was significantly lower: 18 percent were Younger Boomers, those born between 1955 and 1964; 14 percent were Older Boomers, Americans born between 1946 and 1954; and 10 percent were from the Silent Generation, those born between 1925 and 1945.
12 % of all recent buyers had postponed their home purchase because of outstanding debt. Of the 20% of Millennial buyers who took longer to save for a downpayment, 56% noted student loan debt as the biggest debt. 15% of buyers aged 34 to 48 had delayed buying, with 35% having student debt and 46% having credit card debt. Even with the market upsets, the study found that the largest group of recent buyers was the Millennials. The median age of Millennial home buyers was 29, their median income was $73,600 and they typically bought an 1,800-square foot home costing $180,000. The typical Gen X buyer was 40 years old,had a median income of $98,200, and purchased a 2,130-square foot home costing $250,000.
NAR mailed a 122-question survey in July 2013 to a national sample of 148,011 home buyers and sellers who purchased their homes between July 2012 and June 2013, using a random sample of county records. It generated 8,767 usable responses, weighted to be representative of sales on a geographic basis; the adjusted response rate was 6.1 percent.
For more information on this study visit: NAR website.
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Lang Premier Properties are Birmingham Realtors specializing in Oakland County Real Estate. Stephanie is an agent with Max Broock in Birmingham, Michigan. See what past clients have to say about Stephanie Lang. Lang Premier Properties looks out for your best interests when you purchase a new custom luxury home. We always recommend working with an experienced luxury real estate agent when buying a new luxury estate.