It is common that people think the younger generations aren't interested in homeownership, which isn't the case. What was considered an 'ideal timeline' decades ago doesn't fit the current generations. While it is true that some of the younger generations have waited to purchase a home until things like their student loans are paid off, a large number of young people are still interested in purchasing their first home.

Odeta Kushi, Deputy Chief Economist for First American, explains why young people have put off certain milestones linked to homeownership. Those delays led to their homeownership rates trailing slightly behind the older generations:

“Historically, millennials have delayed the critical lifestyle choices often linked to buying a first home, including getting married and having children, in order to further their education. This is clear in cross-generational comparisons of homeownership rates which show millennials lagging their generational predecessors.”

So, it’s partially true that some of the younger generation has waited on homeownership to focus on other things in their lives – and that’s impacting certain housing market trends.

Data from the National Association of Realtors (NAR) indicates the average age of a first-time homebuyer is higher today than it’s been over the past 40 years. As the graph below shows, homebuyers today are purchasing their first home an average of 4 years later than people in the 1980s and early 1990s:

But just because young people are hitting certain milestones later in life doesn’t mean they’re not interested in becoming homeowners.

The recent U.S. Census reveals a significant increase in homeownership rates for young homebuyers.

As the graph above shows, young people are entering the market in full force, and their share of the market is growing. Based on the data, the belief that younger generations don’t want to buy homes is a misconception. In fact, the recent Capital Market Outlook report from Merrill-Lynch further drives home this point, as it specifically mentions the effect young people are having on demand:

“Demand is very strong because the biggest demographic cohort in history is moving through the household-formation and peak home-buying stages of its life cycle."

Millennials', being the largest generation, impact on the market is growing as more and more people from that generation reach homebuying age – and Generation Z isn’t far behind, either. That means younger generations will likely continue to drive demand in the housing market for years to come, with many being first time homebuyers.

The Bottom Line

As members of the younger generations, it is okay to want to start your homeownership journey! Even consider building your first home, as the costs are similar, and the differences are HUGE! The team at Faber Builders, Inc. is here to help you every step of the way. We've been in the business since the 10980's, so you can trust us. Just fill out  the form below to get started!

This post, More Young People Are Buying Homes, first appeared on the Keeping Current Matters website