Real Estate Housing Market: Increasing National Market Sales Came From Millenials
The housing market is experiencing a millenials invasion - and it's the good kind, Standard Times reports.
"They are not only the future, they are the present for housing," says top economist Jonathan Smoke from Realtor.com. "They are the biggest age group buying homes today."
Based on the latest survey by the National Association of Realtors, 30 percent of national market sales come from the millenials sector.
During the industry's annual conference held in San Diego earlier this month, Smoke shared the increasing trend to Realtors present on the event. "Millennials are 60 percent of first-time home shoppers. There are 87 million of them."
A research conducted by Realtors revealed that three-fourths of millenials who purchased homes this year moved up from apartments, while 20 percent are those who are moving out of their parents home and have just finished school and are looking to jump start their careers.
"They are suffering from ever-increasing rents - that's driving those that can into the market," Smoke said. "They are dreaming about escaping from mom and dad's basement."
Millenial buyers are those coming from the age group of 25 to 34, and these buyers lean towards pre-owned houses.
"They are turning toward closer-in subdivisions," he said. "These are older, interesting neighborhoods with interesting architecture.
"They are very into real estate. Real estate is cool again, especially for young people."
The surge of younger clients poses a challenge to real estate professionals who are mostly in their 50s; adjusting their strategies to get around millenials.
"Reaching out to millennials is a top priority for our industry," said Tom Salomone, President of a real estate sales association. "We are trying to infuse our industry with young people."
But millenials are facing challenges whilst favoring homeownership.
"They face competition from both vacation buyers and investors," said Realtors' researcher Jessica Lautz. "The most difficult step for a homebuyer today is finding the right property."
Add to that student debt which could be thousands of dollars. According to Lautz, 41 percent of millennials who are first-time home buyers have student debts. Most of them owe an average of $25,000.
Paying for the student loan compromises the ability of first-time home buyers to save up for a home in three years, and soaring rental fees are also considered factors, Realtor survey finds.
Because of this, there hasn't be an increase in the number of millenials home buyers this year, and their home buying market share is in its lowest for the past three decades.
"The decline in first-time buyers this year surprised us," Lautz said. "We expected it to increase.