Despite being one of the largest groups of homebuyers, more millennials are choosing to “rent forever.”
In 2018, 13.3% of millennials said they never owned a home and “always rented”. According to Apartment List’s 2022 Millennial Homeownership Report, that number has grown significantly in a short period of time, indicating that millennials are giving up on homeownership. By 2022, nearly 25% of millennials never bought a home and always planned to rent.
Millennials, ages 26 to 41, hit the peak of home buying in the midst of the global pandemic and the hot housing market that followed. At the same time, millennials have overtaken baby boomers to become America’s largest generation.
According to the National Association of Realtors’ 2022 Homebuyers and Sellers Generational Trends Report, based on numbers alone, millennials now make up the largest share of homebuyers at 43%.
Historically low interest rates have accelerated millennial homebuying in 2020 and 2021, making it the fastest growing segment.
This summer, the market has shut out millennials looking to buy their first home. Interest rates soared to 5.89% on his 30-year interest rate, but House prices didn’t go down so fast.
For millennial renters who couldn’t afford to buy a home before the pandemic, their prospects for homeownership have weakened over the years, according to the Millennial Homeownership Report.
Since 2018, the Tenant Survey has collected responses from over 31,000 millennials. Survey respondents included only renters who did not purchase a home.
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Renting can buy you time to find the right job, city, or partner, but flexibility is no longer the reason millennials hold back from homeownership.
In 2018, nearly 42% of millennials cited flexibility as a reason to rent instead of buying a home. In 2022, that percentage has shrunk to his 28%.
The biggest reason for renting continues to be financial. This year, 77% of millennials surveyed said they couldn’t afford a home.
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The financial barriers to homeownership began with a lack of personal savings. The majority of millennial renters surveyed say they have nothing saved for a down payment. According to Apartment List, millennials who save a down payment, on average, he’s set aside $12,773.
To make up the difference, 21% of millennials say they expect a down payment from their family.
Given that the cost of buying a home is about 80% higher than it was just three summers ago, according to the National Association of Realtors, potential buyers are in a tough spot. I’m here.
As a result, the affordable market Realtor.com.
This website determines monthly hot market listings based on demand as measured by unique viewers per Realtor.com property.
The Midwest has nine places on the list of hot home markets for August, while Michigan has two places, Monroe and Saginaw.
In the hottest markets, the median listing price in August reached $332,000, an average of 23.6% lower than the national median of $435,000. Both Michigan locations were cheaper than the hot market median.
The bright spot for affordable millennials is that the housing market is in a period of correction. The pace of purchases has already slowed nationally and statewide.
Michigan sales fell 15.5% in July from a year earlier, according to Michigan real estate data firm Realcomp. Nationwide existing home sales are down for his fifth straight month, according to the National Association of Realtors.
Giving homebuyers space to shop will help level the frenetic price hikes and bidding wars we’ve seen over the past two years.
Similarly, economists are optimistic that inflation has peaked or is about to peak, and if the Fed withdraws its rate hikes, it will eventually have knock-on effects on mortgage rates.
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