Millennials A Homebuying Force
These young Americans are now maturing into consumers keen to own homes, studies show. In fact, according to a recent Realtor.com survey, this year's huge jump in demand for first-time homes has been driven by millennials.
The group is starting to earn more and gain job confidence. That makes them a prime target market for homebuilders going forward.
For homebuilders, innovation is a necessity as millennials become one of the fastest-growing real estate constituencies. This generation is eager for "smart" home technologies and energy-efficient homes.
According to Realtor.com, in January 2017, Millennials surpassed Generation X as the group that was responsible for the most new mortgages. Since then, Millennials' share of the mortgage market has continued to rise.
By the end of 2018, Millennials represented 45% of all new mortgages, compared to 36% for Generation X, and 17% for Baby Boomers.
What's new is that Millennials also finally surpassed older generations in the total dollar amount of those mortgages. According to the data, Millennials now represent the largest dollar volume by age group as well.
Given that the majority of Millennial homebuyers are searching for their first homes and do not bring equity from a previous home, it's no surprise they are putting down smaller down payments. This is likely a driver of their activity in more affordable markets, where their money goes further.
SOURCE: APARNA NARAYANA - nasdaq.com
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