The younger generations are proving to be much more optimistic about real estate investments than older age groups. While the homeownership rate for young adult is currently quite low, the potential for home sales is high. Millennials, buyers ages 24 to 37, will purchase at least 10 million homes over the next 10 years. The U.S. Census Bureau estimates that by 2060, this generation will have produced more than 20 million first time homebuyers. Senior economist for First American Real Estate, Odeta Kushi, said the demand for homeownership by Millennials was one of the biggest factors influencing the 2018 housing market. Clients ages 37 and younger make up 36% of current buyers.
As real estate buyers, this age range could be easy to work with. Typical requirements include plenty of space and amenities, but many are willing to compromise on almost anything to keep costs to a minimum. These buyers are allured by places known to be strong technology and cultural centers. They search for booming job markets and a wide variety of social amenities. Many members of the younger generation are forgoing the “starter” home for an investment that they can live in for the next 10 years or more.
Eighty-three percent of those surveyed said they plan to buy a home within the next five years. However, many did mention that the number one obstacle that could delay them from becoming homeowners is “college debt.” Other factors included down payment, job insecurity, credit score, and increasing home prices. Combinations of these financial hurdles could play a big role in delaying these first time homebuyers.