Older millennials between the ages of 25 and 34 years old have become more positive regarding homeownership and are expected to gain market share during the second half of 2015.
“Historically, they’re the largest demographic of homebuyers and can have a dramatic impact on housing,” said Jonathan Smoke, chief economist for realtor.com. “We’re observing an uptick in millennial traffic and sentiment that we expect will result in more first-time homebuyer sales in the later part of the year.”
According to a survey conducted by realtor.com, in mid-June, 65 percent of 25- to 34-year-olds who responded indicated they intend to buy a home within three months. This percentage is up from 54 percent in January.
“Last year, first-time-buyer market share decreased as the year progressed and dropped all the way to 27 percent in the summer,” Smoke said, adding as the economy continues to grow over the next few years deals involving first-timers — a larger percentage of which will be millennials — will account for 40 percent of the market.
In the first half of June, realtor.com saw its share of traffic represented by older millennials looking for a home increase to 23 percent, up two percentage points in comparison to January.
Realtor.com found that during the first half of 2015, millennials were held back from buying due to a number of challenges, the primary one being the lack of affordable inventory.
Forty-one percent of millennials cited the inability to find a house that “meets their needs” as the biggest factor holding them back from a purchase. Others cited reasons such as difficulty finding a home within budget, not spending enough time looking and needing to improve their credit score.
One aspect that is likely impacting millennials’ credit scores and budgets are expenses related to education. According to a survey conducted by Princeton Survey Research Associates International, 50 percent of 18- to 29-year-olds are losing sleep worrying about how to pay for educational expenses.
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