Home Buying: The Waiting Game for Millennials May Be Over
Article by Daily Real Estate News | June 26, 2015
Millennials are primed to gain market share in the second half of the year as more decide to take the plunge into home ownership, according to a consumer behavior survey of more than 12,000 respondents conducted by realtor.com®.
Last year, first-time buyer market share decreased as the year progressed and dropped to 27 percent in the summer, according to data from the National Association of REALTORS®.
“This year, we’re seeing an increase in millennial demand that points to a strengthening first-time buyer demographic,” says Jonathan Smoke, realtor.com®’s chief economist. “As the economy continues to grow over the next few years, we can expect first-timers to return to a healthy level of 40 percent of the market. A return to that level would add approximately 15 percent to the number of total homes sold.”
The National Association of REALTORS® reported earlier this week that a surge in first-time home buyers last month helped lift existing-home sales to the highest level in nearly six years. The market share of first-time home buyers in May rose to 32 percent of existing-home sales transactions, matching the highest share since September 2012.
First-time buyers are critical to a healthy housing market, Smoke says.
“Historically, they’re the largest demographic of home buyers and can have a dramatic impact on housing,” Smoke says.
Realtor.com® notes that since the beginning of this year there has been a slight increase in older millennials – those between the ages of 25 and 34 years old – visiting its website and mobile applications for home searches. The share of traffic by older millennials looking for homes to purchase rose to 23 percent, compared to 21 percent in January. Meanwhile, realtor.com® reports that the share of those looking for rental properties fell to 20 percent from 26 percent in January.
Also, realtor.com®’s analysis notes that 65 percent of 25 to 34 year olds surveyed said they intend to purchase a home within three months, up from 54 percent in January.
Source: realtor.com®; REALTOR® Magazine Online, Daily Real Estate News 062615