Young Optimism Drives Housing Market

With the housing market stabilizing at a slow and steady pace, one thing remains fairly constant — optimism about being a home owner among young renters who expect to become home buyers in the near-to somewhat near-future remains high. Though we continue to ecperience a steady stream of buyers and not yet enough inventory, the housing market is definitely still bouncing back — especially if you ask members of the Millennial generation (those born between the early 1980's and the late 1990's).

In a recent study this past Spring by the National Association of Realtors, 87 percent of buyers age 33 and younger considered their home purchase a good financial investment. Survey participants cited their aspirations and long-term stability as factors in their optimism for the market. What is heartening about this positive energy is that, even with the market frictions they came of age in, the study found that the largest group of recent buyers were these Millennials (sometimes called Generation Y or Generation Next),  who comprised 31 percent of recent purchases. They were followed closely by Generation X (those born roughly between the mid 60's and early 80's) at 30 percent.

 I thought these were some other interesting stats:

• Millennials have the largest share of first-time buyers at 76%. The share of first-time buyers declines as age increases. Among the Silent Generation (people born during the Great Depression and World War II) only 2% of buyers are first-time buyers.

• Among all generations of home buyers the first step in the home buying process is looking online for properties for sale. Millennials are most likely among generations to also look online for information about the home buying process, while the Silent Generation is most likely to contact a real estate agent.

• More than half of Gen Y and Gen X buyers used a mobile device during their home search. Among those who did, 26% of Gen Y and 22% of Gen X found the home they ultimately purchased via a mobile device.

• Younger buyers were predominately referred to their agent through a friend, neighbor, or relative, while older buyers were more likely to use an agent again that they previously used to buy or sell a home.

• Overall 88% of recent buyers financed their home purchase. Nearly all (97%) of Millennial buyers financed compared to just 55% of Silent Generation buyers.

• Among the generations, Millennials (29%) are the largest group who are recent home sellers followed by both Older Boomers (22%) and Younger Boomers (21%).

• Younger sellers are more likely to use the same real estate agent or broker for their home purchase than older sellers, as they are typically moving closer to their previous residence.