Millennials Are Buying Most of the Houses in 2020
It’s no secret that it is currently a seller’s market, but do you know who is the driving force behind this boom? Millennials.
The demand for homes in 2020 has been astronomical – and it does not show any signs of slowing down. So, what is drawing so many potential buyers to the market? Lawrence Yun, the Chief Economist for the National Association of Realtors, mentioned that record-low interest rates are the primary reason more and more people are becoming homeowners.
Millennials currently comprise the largest generation in the U.S. Among them, 4.8 million will be turning 30 this year and are starting to reach milestones in their lives that members of previous generations did not see until later in their 30s. Contrary to some beliefs, Millennials have the drive to make money sooner, live life to the fullest more quickly, and take risks. Their ambitious financial goals and willingness to start families at a younger age push Millennials into homebuying earlier than previous generations.
The number of Millennials planning to purchase a home within 12 months rose 2% from Q3 in 2019 to Q3 in 2020. With FHA loans only requiring a minimum of 3.5% down plus a decent credit score, it is becoming easier to secure financing for homes. The problem, though, is there is not enough inventory to support the buying demand.
As mortgage professionals, we see a shift to suburban downtowns – meaning “family-friendly lifestyles and affordable housing.” Builders are closely watching the wants and needs of Millennials and building communities with the interests of younger buyers in mind. Everything is walkable and retail shops can be found alongside experiential buildings with work capability, like co-sharing office spaces, to truly combine an urban feel with suburban affordability.
How can Millennials take advantage of preparing for this competitive market?
There is a shortage of entry-level homes. George Ratiu, senior economist with Realtor.com, says “considering how many young people are becoming of age to buy, right now we are underbuilt by about 4 million homes.” Homebuyers, take it from this loan originator: make sure you get pre-approved for your mortgage before you start looking at homes. This will help you prepare a monthly budget, and it also makes your offer more competitive to sellers who want the deal to move along quickly and efficiently.
Remember, always make your best offer — and a pre-approval from us helps you do exactly that. Contact us today to get started!
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. CrossCountry Mortgage, LLC (“CrossCountry”) does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by CrossCountry.