2015: The Return of the Millennial Home Buyer
Earlier this month, Zillow predicted
that millennial buyers (under the age of 35) will become the largest
group of buyers, overtaking Gen X (35-50 years old) by the end of 2015.
Dr. Stan Humphries, Zillow Chief Economist, explained:
“Roughly 42 percent of millennials say they want to
buy a home in the next one to five years, compared to just 31 percent of
Generation X, and by the end of 2015 millennials will become the
largest home-buying age group. The lack of home-buying activity from
millennials thus far is decidedly not because this generation isn’t
interested in homeownership, but instead because younger Americans have
been delaying getting married and having children, two key drivers in
the decision to buy that first home. As this generation matures, they
will become a home-buying force to be reckoned with.”
Two days later, Realtor.com also projected that Millennials will be a driving force in the housing market next year. In their 2015 Housing Forecast, they claim:
“Households headed by millennials will see
significant growth as a reflection of economic gains. Millennials will
also drive two-thirds of household formations over the next five years.
Next year’s addition of 2.75 million jobs and increased household
formation will be the two key factors driving first-time buyer sales.”
Has the Millennial Home Buyer already re-entered the market?
AEI’s International Center on Housing Risk also released their first First-Time Buyer Mortgage Share Index
this month. The report revealed that the percentage of first time home
buyers may have been underestimated in 2014. According to the report,
the percentage of first time buyers “averaged an estimated 46 percent over the 12 months ending October 2014”.
That number far exceeds other numbers reported by the National Association of Realtors and others.
The Millennial generation is growing up, finding jobs, getting
married and starting families. Homeownership will definitely be the next