Millennials who have been slow to make the move to homeownership are finally starting to edge out older buyers.
Last year millennials accounted for 36 percent of U.S. home buys – more than any other age group according to the National Association of Realtors. Baby boomer buyers were a close second with 32 percent of home purchases.
Sales to millennial buyers would be even higher if there were more affordable properties available for first-time buyers, industry analysts say.
“Realtors throughout the country have noticed both the notable upturn in buyer interest from young adults over the past year, as well as mounting frustration once they begin actively searching for a home to buy,” Realtors chief economist Lawrence Yun said about the latest profile of buyers. “Prices keep rising for the limited number of listings on the market they can afford, which is creating stark competition, speedy price growth and the need to save more in order to buy.
“These challenging market conditions have caused – and will continue to cause – many aspiring millennial buyers to continue renting.”
The Realtors study found that a typical millennial buyer had a household income of $88,200 and purchased a house with a median price of $220,000.
Almost half of the millennial homebuyers reported that they also had student debt with a median loan balance of $25,000, the Realtors found. High student debt had been identified as one of the top factors keeping renters from buying a house.
First-time homebuyers made up just 34 percent of U.S. home sales last year, down from 35 percent in 2016. The share of first-time homebuyers has plunged from 2010 when they accounted for half of all home sales, according to the Realtors.
Sixty-five percent of recent homebuyers said they were married couples. And 37 percent of homebuyers had children under age 18 living at home.
The Realtors found that the nationwide average size for recently purchased homes was 1,870 square feet, with three bedrooms and two bathrooms.
With rising mortgage costs and soaring home prices in many markets, homeowners are staying put longer. Recent buyers said they expect to live in their homes for a median of 15 years. And 18 percent say that they plan to never move.
About 40 percent of the buyers said they previously rented an apartment or house. Another 12 percent said they previously lived with family or friends.
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