A younger demographic is beginning to take on the housing market. Millennials, or individuals born from 1981 to 1996 (22 to 37 year olds), have officially entered the housing market.

Where Are Millennials Taking Their Real Estate Efforts?

Although interest rates are rising, housing prices are predicted to stabilize in 2019 which provides more affordable options for Millennials and first-time homebuyers. In addition to securing better jobs and having deeper pockets, affordable housing certainly helped Millennial’s enter the housing market.

The stereotype that Millennials only want to live in large urban areas is no longer true. The group is focusing their efforts in less traditional secondary markets where homes are more affordable and jobs are more available.

Areas such as Buffalo, New York, an area seen as less desirable by previous generations, is the top affordable market for Millennials.

Are Millennials Surpassing Previous Generations in the Housing Market?

New Realtor.com data has found interesting stats about Millennials, Generation X, and Baby Boomers in the housing market over the past couple years and it has provided some fascinating results.

Here’s a few:

• Millennials were responsible for most new mortgages in 2017 and this has continued to increase
• In January 2017, Millennials surpassed Generation X in holding the most new mortgages and with the biggest dollar amount
• By the end of 2018, Millennials represented nearly 50% of mortgage holders, compared to 36% for Generation X, and 17% for Baby Boomers
• The median price of a mortgaged home purchased by Millennials was $238,000
• Millennials made lower down payments because most are first-time homebuyers without any equity from previous homes

Will Millennials Continue to Dominate the Housing Market in 2019?

Although Millennials are fully submerged in the housing market, a few factors have caused a delay in their entrance and future housing market control is unclear.

Here’s why:

1. Student loans – it can take anywhere up to 30 years for graduates to pay off their loans which has made it tough to save up for a home
2. Job Changes – more job changes than previous generations have made Millennials hesitant to invest in one neighborhood or city
3. Large Commitment – buying a house can lead to larger commitments such as having children or getting married and a lot of Millennials are not taking this life path

With many Millennials taking a less traditional life route, many still prefer renting as it allows flexibility in larger life decisions.

Buying a home can be daunting to Millennials as it could mean a longer commitment to living in one place. In addition, moving to a different city or state isn’t as intimidating as it was in the past so renting for shorter periods of time has become more ideal. It also allows them to save money for other big investments.

So although Millennials have taken charge of the housing market these past two years, their desire for a flexible lifestyle may cause a shift in their future home buying decisions.

To learn more about Malibu, Los Angeles, or Ventura Real Estate, contact our team!

The Mark & Grether Group at 310.230.5771 or email us at russellandtony@compass.com.