Millennials get chided for their failure to depart the parental nest, but a new analysis by Fannie Mae found that they are heading out on their own in greater numbers today than in recent years.
Rather than comparing the same age group over time, Fannie Mae examined the same group of young adults as they aged. Millennials who are in their mid- to late 20s and early 30s today left home in greater numbers between 2013 and 2015 as compared to between 2010 and 2012.
- Further analysis points to expanding income and higher marriage rates as two primary drivers for the uptick in move-out rates, given, too, that market recovery was stronger between 2013 and 2015 than it was between 2010 and 2012.
One of the most concerning areas of the recovering housing market has been the constraints on millennials, including weaker income prospects and high levels of student loan debt, that are holding them back from buying their first home. Fannie Mae’s report shows that the outlook for this group is improving.
That trend is also reflected in Ellie Mae’s latest Millennial Tracker, which found that the group is closing loans at its fastest rate since March of last year.
Still, even if they are ready to buy, market barriers remain. CNN Money pointed out that millennials now make up the largest share of home buyers — accounting for 45% of purchase loans — but they face competition from older buyers who have been on the hunt for longer as well as from repeat shoppers with more buying power.
A lack of starter-home inventory is compounding the problem. Starter-home inventory declined 8.7% in the first three months of 2017 amid record-low levels of housing inventory overall, according to Trulia.
Affordability continues to be a challenge for millennials, with both interest rates and home prices on the rise.