Millennials are supercharging the housing market
CoreLogic: From Jan.-Aug. 2021, millennials made up about 67% of first-time home purchase loan applications and 37% of repeat purchase applications.
Millennials accounted for over half of all home-purchase loan applications in 2020, and this generation’s eagerness to own homes is a key factor in economists’ expectations of strong home-buying demand continuing for years.
Housing analysts say the pandemic and the advent of remote work have added momentum to already building millennial home-buying trends.
CoreLogic calculates that millennials constituted 67% of first-time home purchase mortgage applications and 37% of repeat purchase applications in January through August, and those numbers could grow even more as the largest percentage of millennials turned 30 this year.
Millennials defied projections by choosing not to sit on the sidelines, and pursued building equity in a home. Whereas in 2019, households of older millennials had a net worth of about 11% below expectations based on what older Americans had at the same age, younger millennials’ net worth was 50% below, according to the Federal Reserve Bank of St. Louis.
First American Financial Corp. chief economist Mark Fleming says buying a home is still more affordable for many first-time buyers than it was for older generations due to higher incomes and falling mortgage-interest rates. He adds that the big decider for millennials in buying a home is whether they can win a bidding war, rather than affordability.
A persistent housing shortfall is also coinciding with swelling millennial demand, and the Third Avenue Real Estate Value Fund’s Ryan Dobratz suggests demand could be massive in the years ahead “because of the millennial cohort finally moving to single-family housing in a big way.”