Why Millennials Aren’t Buying Houses Anymore
By: Yahoo! finance
A surprising shift has happened in homebuying recently. Not only has the housing market gone through enormous changes, but an entire generation is reshaping when and if they buy real estate.
Multiple studies show millennials are not buying homes as quickly as their generational predecessors. Until recently, the majority of millennials were renters. Even now, only just over half (52%) of millennials reported owning a home. It also took millennials longer than any other generation to reach this milestone. On average, millennials were 34 years old when they purchased their first home.
While some were held back due to affordability, others did it on principle, opting for a “renter-by-choice lifestyle.” To get more clarity on the issue, we asked real estate professionals to weigh in on why millennials aren’t buying houses anymore. Here’s what they said.
A surprising shift has happened in homebuying recently. Not only has the housing market gone through enormous changes, but an entire generation is reshaping when and if they buy real estate.
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Multiple studies show millennials are not buying homes as quickly as their generational predecessors. Until recently, the majority of millennials were renters. Even now, only just over half (52%) of millennials reported owning a home. It also took millennials longer than any other generation to reach this milestone. On average, millennials were 34 years old when they purchased their first home.
While some were held back due to affordability, others did it on principle, opting for a “renter-by-choice lifestyle.” To get more clarity on the issue, we asked real estate professionals to weigh in on why millennials aren’t buying houses anymore. Here’s what they said.
Interest Rates and Wages
One reason millennials aren’t buying houses is simply because the money just isn’t there and the rates are just too high.
According to Daniel Pitner, a real estate agent out of Glendale, Arizona, “The current interest rate environment has made homeownership extremely expensive on a monthly basis. The interest rates are rising at an expedited rate, while wages are not keeping up. This is forcing millennials to rent while they wait out the current interest rate and wage environment.”
Affordability
Pitner, a millennial himself, said home prices are another issue delaying the generation from buying. “The unexpected real estate boom of 2020 has caused an affordability crisis amongst millennial home buyers. Because of the higher prices on homes, coupled with interest rates, purchasing a home at the median purchase price equals a monthly mortgage price that is unrealistic for most millennials,” he said
John Myers, the owner and broker for Myers & Myers Real Estate, agreed. “Home prices have skyrocketed in recent years and have made it more difficult to purchase a home for millennials. Add to this that mortgage rates are very high compared to recent years. The combination of high prices and high-interest rates is making it very difficult for millennial home buyers to afford the monthly payments,” he said.
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