Individuals ages 25 to 34 accounted for one-third of homebuyers in September, according to a monthly report from Realtor.com released Monday.
The primary motivations for purchasing a home include attaining more privacy, securing space for growing families and building equity.
- More than half of respondents preferred single-family detached houses, while nearly one-quarter opted for townhouses, row houses or single-family attached houses. Less than 10% preferred condos.
More than half of respondents in the Realtor.com survey identified as first-time buyers, up from one-third who said the same a year ago. Potential buyers who had been on the market for more than three months cited not finding a property that met either their needs or their budget, or both, as the main holdups.
A recent report from Zillow echoes these findings, noting that the average home search lasts 4.2 months, with only 46% of homeowners closing on the first property they put an offer on.
Limited existing property and slow gains in new construction have created tight inventory conditions pushing up prices nationwide. This poses a challenge for first-time buyers, many of whom are in their mid-20s to mid-30s and struggle with student loan debt, limited wage growth and high rents, Realtor.com Chief Economist Jonathan Smoke told Construction Dive earlier this month.
As a result, younger buyers are turning to secondary markets, Smoke said, where a lower cost of living coupled with high earning potential are helping them qualify for down payments on homes. Smoke highlighted Pittsburgh, Provo-Orem, UT, and Milwaukee among the top 10 MSAs for purchase mortgage activity among buyers ages 25 to 34.
Although half of the Realtor.com survey respondents said they were first-time buyers, a smaller share will make it into the market as homeowners. Smoke noted that first-time buyers account for just 33% of home sales today, down from 40% before the recession.