Here are a few reasons Millennials are delaying their home-buying decision.
New and existing home sales totaled only 4.7 million units for 2014, down nearly 10% from 2013. Data from the National Association of Realtors® (NAR) suggests the elusive first-time buyer was partially responsible. NAR’s survey showed that first-time buyers1 accounted for just 33% of new and existing home sales in 2014, the lowest level since 1987.
Last September we highlighted in our student loan white paper that 414K housing transactions would be lost in 2014 due to student loan debt, but this is just the tip of the iceberg holding back first-time buyers.
We agree with recent surveys that conclude young renters want to own a home as much as their parents did2, and this is evidenced by the slight lift from this group thus far in 2015’s selling season. However, we believe the majority of Millennials will buy homes later in life than their parents did, as they get their bearings financially, emotionally, and socially.
1Millennials are individuals born from the early 1980s to the early 2000s. We are using “first-time buyers” and “Millennials” interchangeably as 76% of first time buyers are Millennials.
2Fannie Mae National Housing Survey. Young renter refer to those aged 18-39