This is the Age of Diversity in Home Buying.
2015 and 2016 saw a noticeable influx of Baby Boomers re-entering the Real Estate Market. An estimated fifty-nine million Americans are considering buying a home in 2017. So which demographics are at the front of the pack this time? Generation X (ages approximately 33-50) and Minority homebuyers, according to a recent report by Bankrate.com. These groups represent the greater part of more than sixteen million Americans who have categorized themselves as “very likely” to buy a home.
Minority and Gen X Home Buyers.
Roughly 40 percent of Minorities and 20 percent of Gen Xers have strong intentions to purchase a home this year, the report found.
What About Millennial Home Buyers?
In addition, older Millennials (aged 27-33) aspire to be or are “considering becoming” homeowners, an undertaking only likely with a boost in the affordable housing supply.
“Among Millennials, there’s a lot of pent-up demand for home-buying,” says Bankrate.com Senior Mortgage Analyst Holden Lewis. “They have been stymied by stagnant wages, student loans and a lack of available starter homes. If enough affordable homes are put on the market, we might see a surge of first-time Homebuyers in their early- to mid-30s.”
The reality so far this year, as regards affordable homes or those in the first-time-buyer price range, is one of multiple offers and rising prices due to below average inventory. In order for the Millennial category of buyers to enter the market in any significant way, there will need to be a large wave of Move Up home buyers as very few new home construction companies are building for that price range.
Parents with school-age children are also in the “considering buying” group, according to the report; however, two out of three parents with young children point to “financial issues” preventing them from purchasing. Many of these are credit blemishes (foreclosure, bankruptcy, short sales) left over from the most recent recession, most of which will soon be “timed out” and expunged from credit reports, allowing for the rebuilding of favorable credit scores.
“Having kids and raising a family is a primary reason why Americans take the leap into homeownership—many consider it a key component of the American Dream,” Lewis says.