Candy is in Miami right now, wading through all of the amazing real estate news at the National Association of Real Estate Editors’ annual conference. While we are a little jealous (OK, we are A LOT jealous) of her temporary location and proximity to so many brilliant minds at #NAREE15, we did score this bit of news from Realtor.com’s chief economist, Jonathan Smoke, who was on the “Mortgage Availability for Millennials and Other First-Time Buyers” panel:
“Despite the slow indicators we saw earlier this year, 2015 is on pace to be one of the best years for housing since 2006 due to strong sales and higher than predicted home prices,” said Smoke. “Additionally, we’re observing an uptick in millennial traffic and sentiment that we expect will result in more first-time home buyer sales in the later part of the year.”
This conclusion comes from a survey conducted by Realtor.com, showing a slight increase in Millennials ages 25-34 visiting the website with the goal of buying a home.
Smoke went on to explain that first-timers are especially critical when it comes to the health of the market. “Historically, they’re the largest demographic of home buyers and can have a dramatic impact on housing,” he said.
In the first half of June, realtor.com® saw its share of traffic represented by older millennials looking for a home to purchase increase to 23 percent, as compared to 21 percent in January. In mid-June, it also observed its share of those looking for property to rent decrease to 20 percent, from 26 percent in January.
Another revealing metric is the number of millennials who intend to buy a home within the next three months. In mid-June, 65 percent of 25-34 year olds responding to the survey indicated that they intend to buy a home within three months, up from 54 percent in January. Additionally, older millennials and first-time buyers are very optimistic about buying. Both groups are slightly more likely than the average buyer to say that they are “very likely to purchase within the next 12 months.”
“Last year, first-time buyer market share decreased as the year progressed and dropped all the way to 27 percent in the summer, according to data from the National Association of Realtors,” Smoke said. “This year, we’re seeing an increase in millennial demand that points to a strengthening first-time buyer demographic. As the economy continues to grow over the next few years, we can expect first-timers to return to a healthy level of 40 percent of the market. A return to that level would add approximately 15 percent to the number of total homes sold.”
The big hurdle is finding a home that meets their needs. The tight inventory and high prices in Dallas could be what keeps some Millennials renting instead of buying. I’ve heard stories of investors being much faster to buy fixer-uppers than Millennials who are willing to put in some elbow grease and sweat equity.
Are you seeing more Millennial first-time homebuyers?