Millennial buyers in the United States prioritise living close to friends and family over a home’s location and proximity to schools, and an overwhelming majority used a real estate agent to buy or sell a home.
But lack of suitable homes for sale and higher housing costs are preventing some buying with the numbers buying reaching 34% of all sales in 2017, just 2% more than in the previous year, according to new research from the National Association of Realtors.
But they are still the most active group of buyers. Generation X buyers ranked second at 28%, a rise of 2%, followed by younger baby boomers at 18% and older baby boomers at 14%.
According to Lawrence Yun, NAR chief economist, even though sales to millennials reached an all-time survey high, stubbornly low inventory conditions pushed home prices out of reach for many. As a result, the overall share of millennial buyers remains at an underperforming level.
Revealing the greater purchasing power needed over the past year, the typical millennial buyer in the survey had a higher household income at $88,200 in 2017 than the $82,000 recorded in 2016.
They bought similar sized homes, roughly 1,800 square feet, but spend $15,000 more. Millennials also had higher student debt balances than in the previous year’s survey, and slightly more of them said saving for a down payment was the most difficult task in buying a home.
Yun said that will real estate agents throughout the country have noticed an upturn in buyer interest from young adults over the past year there has also been mounting frustration once they begin actively searching for a home to buy.
‘Prices keep rising for the limited number of listings on the market they can afford, which is creating stark competition, speedy price growth and the need to save more in order to buy,’ he pointed out.
‘These challenging market conditions have caused, and will continue to cause, many aspiring millennial buyers to continue renting unless more Generation Xers decide to sell, and entry level home construction picks up significantly,’ he added.
The research also found that costly rents and growing student debt balances appear to make living at home more appealing, affordable and increasingly more common among young adults just entering the workforce.
When deciding where to buy a home, quality of the neighbourhood is the factor most influencing buyers of all ages, followed closely by convenience to a job for those up to working age and increasingly the quality of a school is having an impact on choice.
Buyers and sellers across all age groups continue to seek the assistance of a real estate agent when buying and selling a home. At 90%, millennials were the most likely to purchase a home through a real estate agent, and help understanding the buying process was cited as the top benefit millennials said their agent provided. Overall, at least 84% in every other generation worked with an agent to close the deal.
