In the real estate world one of the biggest questions is Millennials.The question now is are they going to buy houses. It’s important because millennials are in the age group of first time buyers.
The market has been much stronger but one area where it has lagged is the first time buyer market. It’s the lowest in almost 30 years. That may be alarming, but those in the know think that the drop is a long term thing. Millennials are putting off buying into the American dream, but they haven’t given up on it. While this is good news in the long run, in the short term it will be an issue.
At the moment this age group is shunning home buying. This is for a few reasons. Millennials watched their parents deal with the housing crash, making them more cautious about taking out large mortgages in order to buy a home. They are also, as a group, dealing with massive student debt loads that put a strain on their income and what they are able to save. They are also having a harder time finding employment and while that has become a smaller issue in the last few years, it impacts their decision making.
Another reason they are holding off home buying is that most first time home buyers are young married couples who are settling down. However, Millennials are marrying later. Under age 34, just 24% of women and 30% of men are married, about half the figure for that age group in 1940, according to the Pew Center. The median age of first marriage is now over 29 years for men and 27 for women. That means that they will be in a life position to buy later, say about 35 to 40 years old.
So it’s a mixed bag, but the pieces will fall into place and they will buy houses in the future.