Millennials join other generations in search for homes in the suburbs
- A National Association of Realtors Home Buyer and Seller Generational Trends study has found that although millennials are gung-ho urban renters, when it comes to buying a home, contrary to conventional wisdom, they're looking to the suburbs, just like most of the homebuyers in all other generational groups.
- The NAR found the percentage of millennials purchasing a home in an urban area dropped to 17% from 21% a year ago, and only 10% purchased a multifamily home, down from 15%. The study also found the younger the homebuyer, the older the purchased home.
- One of the findings of the study that may come as a surprise is that, although millennials cite student loan debt as a barrier to saving for a down payment, younger baby boomers actually carry the highest balances.
Lawrence Yun, NAR chief economist, said that the median age of a millennial homebuyer is 30 years old and, at that age, is most likely looking for a place to start a family. "Even if an urban setting is where they'd like to buy their first home," Yun said, "the need for more space at an affordable price is for the most part pushing their search further out."
Yun also said that playing into the decision to buy a home in the suburbs is economics. "Limited inventory in millennials' price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households," he said.
When it came to financing a home, the NAR study found that debt played a huge role in buying ability and delayed the purchase of a home a median of four years on average, three years for millennials and six years for older boomers. The median down payment, says the NAR, was as low as 7% for millennials and as much as 21% for older boomers.
The study also found that Gen X buyers usually purchased the largest homes and were the most likely to be married, millennials had the highest share of single women buyers and older boomer home purchases were in some way associated with retirement.
And how did all of these homebuyers look for a house? The NAR study found that almost all buyers use both the Internet and a real estate agent. The study also found that no matter the generation, the vast majority of sellers use a real estate agent, whether it is to ensure appropriate pricing or to sell within a particular timeframe.
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