Millennials get blamed for the decline of many things — marriage, diamonds, doorbells — but in terms of the housing market and today’s declining home prices, they may end up being the saviors.
According to new data from Zillow.com, a wave of first-time homebuyers is set to hit the housing market within the next few years — one made up of 30-something Millennials finally ready to take the plunge. What’s taken them so long? Let’s take a look at the factors.
Two Sides to This Story
Millennials (those born between 1977 and 1996) are painted as the overeducated and underpaid generation; they face rising costs of living disproportionate to paychecks and are being forced to find their own way when more traditional paths aren’t realistic. Simply put, they can’t afford to be first-time homebuyers — yet.
Babyboomers, though, aren’t helping matters. Two different news polls show that the number of Baby Boomers choosing to age in place, or stay in their current homes indefinitely, has risen from 47% in 2017 to 52% in 2019. This is directly affecting the housing market. The lack of inventory is pushing back the age at which first-time homebuyers begin their search.
Sweet Spot for Sellers
This is where it gets good: The current median age at which buyers purchase their first homes is 34 — and the largest grouping of Millennials will hit the housing market at this exact age within the next 10 years. That’s an extra 44.9 million people, at least some of which will be prepared, willing and ready to purchase their first homes.
This wave of potential buyers will combine with the lack of inventory on the market and create a rise in property prices. And, it may cause nested Baby Boomers to more readily consider padding their retirement funds by selling their homes, leading to more inventory to meet this demand.
In metro locations, the number of up-and-coming homebuyers will hit its peak. In fact, Boston is cited by Zillow as the No. 1 metro area poised to benefit from Millennials coming of homebuying age. And, as their families age out of tight condos in the city, these middle-aged Millennials will look to the suburbs for more affordable housing options.
A Bright Future
It may take a few years, but the light at the end of the tunnel is bright, even as home prices continue to drop. When the time comes for you to sell your home, purchase your first one, or upgrade to a new one, be sure you have the experts at Scafadi Juliano at you side to handle your legal needs. Contact us to start the conversation today.