May 16, 2017

A lot has been made in recent years of millennials putting off home buying and electing to rent instead. Some argue it’s because they’re overburdened by student loans, or that they’re putting off marriage and children, or that they simply prefer renting – and the flexibility that accompanies it – to owning a home. It’s no secret that nearly everyone in the home building industry is waiting for the dam to break so that the flood of millennial buyers will start to flow. And some economists say that the time is approaching. “We have found that millennials are very optimistic about homeownership and many of them do aspire to [own] one day,” said Svenja Gudell, chief economist of Zillow. She shared Zillow research in which 65% of millennials said owning a home is necessary to live the American Dream, which is more in line with the silent generation (64%) than baby boomers (57%). But still, millennials aren’t purchasing homes in the same numbers as previous generations did just yet.

According to Gudell, there are three impediments for millennials who’d like to buy a home. The first is getting together enough money for a down payment, which can be attributed to high rent prices and student loan debt that make it hard to save money. The second is getting access to a home loan for those who don’t have a conventional job. The last impediment is also the biggest, Gudell said: A lack of available homes. “When you get out there and search for an available home to buy, often times you’re out of luck because there are very few homes available on the market, especially if you’re looking for starter homes and entry-level types of homes across many markets in the U.S. right now,” she said. Source: Builder Magazine