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Millennials Move to Homeownership

June 1, 2021

June is National Homeownership month and BIAW celebrates by highlighting the American Dream of homeownership for a large generational group, the millennials.

Interests in buying

Interest in home buying has not slowed down this year, in fact, it has risen just as the supply of housing has decreased. Among the different generational groups, millennials, those born from 1981 to 1996, are showing the most enthusiasm when it comes to purchasing a home.

According to the latest Housing Trends Report by the National Association of Home Builders (NAHB), millennials are the most likely generation to have moved on from planning a home purchase to actively searching for a home to buy in the first quarter of 2021.

According to the report, 73% of millennial prospective buyers were already active buyers in the first quarter of 2021, an increase from 54% a year earlier.

Several factors are driving this trend. Buyers are afraid of missing out on still relatively low mortgage rates. The pandemic has also increased the desire for more space at home. For example, another recent NAHB study on consumer preferences revealed that 63% of recent and prospective home buyers want a home office for the accessibility of working from home. Another factor influencing home buying is the desire to move to the outlying suburbs. In the larger cities, the prices of homes are much higher than in outlying neighborhoods, thus making it more affordable to live further away from a job and commute to work than to live close by.

A positive outlook on housing

Millennials also continued a positive outlook about housing stock in regards to the near future compared to other generations. The share of millennial buyers who expect housing availability to ease up in the months ahead rose decisively between the first quarters of 2020 and 2021, from 26% to 42%. In contrast, the share declined slightly among the other generations.

In terms of the actual number of homes buyers are seeing for sale (that they like and can afford), 40% of Americans reported seeing more available in the first quarter of 2021 than the previous quarter, up from 31% a year earlier. Millennial buyers were the most likely to report seeing more homes for sale in the market in the first quarter of 2021, at 46%, compared to 34% a year earlier.

The pandemic changed many things in our everyday lives, but the urge for more space and a permanent residence rose drastically. Millennials are just one of the many groups trying to find and afford a home in Washington during the housing supply shortage. Remember that owning a house creates generational wealth and financial opportunities and that goal should be achievable for all.

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