According to the NPR broadcast linked below, national home sales continue to rise but the amount of first time home buyers remains stagnant. Is it that more and more millennials are not interested in the commitment of a mortgage or is it that it’s much more financially challenging to buy a home now than it was for previous generations’ first time home buyers?
First, let’s explore the former. One could argue that Millennials are not eager to be tied down. According to Bently.edu, “The median age at first marriage is now 27 for women and 29 for men — up from 20 for women and 23 for men in 1960.”
This could be a shift in priorities as there is a movement amongst Millennials to buy tiny homes and thus reduce their monthly costs to better afford other freedoms such as travel.
On the other hand, the decision could be more financial. One could argue that Millennials are simply unable to buy a house as early because their careers are delayed due to the increased demand for further education, they then acquire more debt because of this demand and the over inflation of Universities, and they are remain on a single income for longer than previous generations. To make it even harder, the Cheif Economist of the National Association of Realtors, Lawrence Yun states, “Young people are squeezed from both sides. Rents are increasing even faster than home prices.
In reality, the reasons for the lack of first time home buyers is probably a mix of financial and cultural reasons. One fact remains the same, home ownership makes more financial sense than renting over the long term. I believe we are going to likely see a significant increase in Millennials purchasing homes in the near future.