Source: US News —
Millennials were already having a hard time becoming homeowners, but as new data shows, 2022 only added fuel to the fire.
According to the 2022 Profile of Home Buyers and Sellers report from the National Association of Realtors (NAR), millennials are no longer the biggest cohort of homebuyers as they were in 2020 and 2021. Instead, it’s 55- to 74-year-old buyers who take the crown, accounting for 44% of all home purchases so far this year.
Young millennials, who are typically first-time homebuyers, made up just 14% of purchases – down from nearly a quarter in 2021.
“The share of first-time homebuyers dropped to the lowest level we’ve ever recorded,” says Jessica Lautz, deputy chief economist and vice president of research at NAR. “What’s really striking about the first-time homebuyers this year is that the median age moved to 36 years old. We’re now seeing a first-time homebuyer who’s now closer to 40 than they are to 30.”
Skyrocketing home prices, a housing supply shortage, and decade-high mortgage rates are largely to blame for millennials’ pullback from the market, but still, these young consumers are determined to buy homes. A survey from Bank of America shows that 67% of millennials – also known as Gen Y – are “likely” to buy a house in the next two years.
Gen Z, which tops out at age 25, is set on it, too. In fact, nearly 9 in 10 say they’d like to own a home in the future.
The question is will they be able to? And what conditions will they face if they try? Here’s what industry experts say these Gen Z and millennial homebuyers can expect from 2023’s housing market – and how to succeed if they dive in.
The 2023 Housing Market
Limited supply has plagued the housing market in recent years, and it’s part of why prices have climbed so steeply.
Unfortunately, most don’t see this changing any time soon. While listings have increased in recent weeks, the active inventory is down 38% compared to 2017-2019 levels. And with homebuilders pulling back and many existing homeowners sitting on record-low mortgage rates, a huge influx of inventory just isn’t in the cards for next year’s millennial and Gen Z buyers.
;
