How Millennials are modifying the Housing market
For the last several years we have witnessed millennials struggling to enter the housing market. Real Estate prices have been in an upward momentum due to many economic factors including: Low inventory, institutional investors, bidding wars, and Covid-19 just to name a few. Many Millennials have settled for renting or living with family in the previous years. In 2021 we saw this change as Millennials entered the housing market in record numbers.
In 2021 Millennials accounted for 51% of all mortgage applications (approved or not), and also represented about 37% of all home purchases. These numbers are estimated to continue to increase in 2022.
It has taken Millennials longer than previous generations to enter the housing market. Some factors for this delay may include Entering into the job market during a recession, taking on large student loan debt, and even the struggling to find the right careers. Many Macroeconomic factors have played a part in making now the right time for millennials to come out of the woodwork.
The Pandemic changed the dynamic of most jobs allowing employees to work from home, some have even adopted these changes on a permanent basis. This change has given millennials the freedom to leave the cities and move to the suburbs. Many millennials are experiencing the liberating feeling of paying off student loans, car payments, and other debts. Millennials are also progressing in their careers and bringing home more money. All of these factors are playing a role in the stampede of millennials jumping into the housing market.
Why does it matter?
Millennials are currently the largest living generation, they represent 72.1 million people. They are definitely a force to be reckoned with. They will continue to have an impact on the housing and job markets into the foreseeable future. Over 80% of First Time Buyers are Millennials, so it is safe to say they will continue to be a large percentage of the market respectively. Companies are catering to this new generation of home buyers by offering digital innovations throughout the home buying experience. Virtual showings, E-signings, and Virtual pre approvals are all geared towards convenience and their preference for technology.