Millennial Demand Should Keep Housing Strong for Years

NEW YORK – Millennials’ expanding wealth and growing families prompt more to become homeowners. Ultra-low mortgage rates also help.

Young adults ranging from 26 to 41 years old comprise about 22% of the U.S. population, the reason the housing market has watched this age segment so closely for so long.

More millennials have become homeowners since the pandemic and account for the largest share of homebuyers over the past year – 37%, reports Barron’s.

The pandemic also motivated millennial purchases. The number of households headed by adults aged 30 to 44 years old jumped by 1.3 million during the pandemic.

Married couples ages 31 to 40 were more likely than any other age group to purchase homes, according to the National Association of Realtors®. And the largest group of unmarried couples who purchased homes were adults between the ages of 22 to 30.

Millennials are now approaching their peak earning years.

“Over the next couple of decades, a quarter of the U.S. population is going to reach peak earning years, fueling continued housing demand – especially for inexpensive starter homes, which nationally had a beginning price of $304,200 in the second quarter of 2021,” Barron’s reports.

Remote work may only further housing demand. Millennials were the most likely generation to say that the reason for owning a home was to have a space of their own for a larger home, according to NAR data.

Student loan debt continues to hit this generation hard, however. That has made it more difficult to save enough to afford higher home prices.

But housing analysts continue to remain bullish about the millennial generation’s impact on housing. Low interest rates, strong employment, and the growing perceptions over the importance of a home will likely continue to fuel a millennial housing boom, writes Dana Peterson for Barron’s.

Source: “Millennials Will Drive Home Prices Up for Years to Come,” Barron’s (Oct. 31, 2021)

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