During the Realtor University Richard J. Rosenthal Center For Real Estate Studies Forum held recently, realtors from different parts of the country attended and gathered to talk about the effects of changing homebuyer demographics on the housing market.
“Among primary residence homebuyers, the demographics have shifted dramatically, especially among first-time homebuyers, whose share of the market has dropped to its lowest level in decades,” said to Jessica Lautz, director of member and consumer survey research for the National Association of Realtors.
“We have also seen an increase in the median age and income of the average buyer, as well ask multigenerational household formations as adult children and elderly family members move back in with their families,” she added.
One of the most popular topics discussed in the forum was adult millennials, individuals who are within 18 to 33 years old. This year, such age group experienced a 60 percent increase in job growth that the US overall with their unemployment rate falling by 6 percent. Such positive growth and the increase in economic opportunities should motivate the millennials to purchase homes in the succeeding years.
“Millennials are the largest generation of people in the U.S. and represent 60 percent of first-time homebuyers,” Chief Economist For Realtor Jonathan Smoke said. “They are also more likely than any other group to purchase a home in the next year.”
Economists saw that most of the buyers where kept out of the market due to drop in inventory, difficulty in getting credit and lower than average income. However, these are just temporary hindrances.
It’s not that young people don’t want to purchase homes, it’s that they are delayed the purchase,” Vice President of Research For the National Housing Conference Lisa Sturtevant said. “Many of the reasons millennials are not forming households or making purchases are economic, so as the economy improves, we should see this group become more of a force in the housing market.”
However, Smoke claims that its a misperception that millennials not still not in the market. “They represented 37 percent of home shoppers this summer, and over the next 5 years his generation will make up two-thirds of household formations, Smoke said. “Between June and September 2014, over half of adults aged 21-34 visited real estate websites or mobile apps. And this is the cusp – get ready for the millennials wave to drive the housing market for decades.”
But baby boomers will be competing with the millennials in the dominion of the housing market. “With millennials searching for new homes, baby boomers downsizing and groups with historically lower incomes all entering the market, an increased demand for smaller, less expensive homes will begin to merge,” Sturtevant said.