Millennials, that Generation Y group of viral vendors quick to spread the word about how much “younger” they are than you, have also been a little slow to spread their wings when it comes to leaving the nest.
While that prolonged nesting period has created a digital-age “buffering” of sorts in the real estate market, there are signs that millennials are finally ready to connect with the home-buying community.
According to a recent study by the National Association of Realtors, those 34 and younger represented the largest share of recent homebuyers at 32 percent of the total home-buying population in the U.S. Generation X, meanwhile, (represented by those in the 35 to 49 age demographic) constituted the second-largest home-buying group in the NAR survey at 27 percent.
The improving job market is said to be nudging millennials toward home ownership as they see the benefits of building equity over watching their savings evaporate — due to increased rent and leasing costs. Or, they could just be realizing the social benefits of living in their own space and finally giving mom and dad a little more breathing space.
Interestingly enough, while parents have been helpful in keeping a roof over their millennials’ heads, they have also been instrumental in the moving-out process. A survey conducted by consumer lender loanDepot says the “Bank of Mom and Dad” is playing a significant role in the housing recovery as many millennials turn to their parents for support in buying starter homes. About 65 percent of parents admitted to chipping in down payments for their kids to buy a home; another 25 percent reported footing other expenses, and 25 percent said they ponied up funding for their kids’ closing costs.
No matter the reason for the recent uptick in millennial home-buying, the real estate industry is embracing it. Overall housing sales in March were up 10 percent over the last year, according to the NAR — even with home prices on the rise again. And the trend is expected to continue to grow as millennials work to reduce their debts and start their own families — which, incidentally, may include a few reminders of their “younger” selves.
Join Realtor Diane Brennan for That Real Estate Show every Sunday at 8 a.m. on KTAR News 92.3 FM.