It’s official. Millennials are all grown up, and though for a while it seemed like they would never be able to move out on their own, statistics exemplify how the generation born between 1980 and 1995 are currently buying more homes than any other age group.
The National Association of Realtors (NAR)—a trade organization comprised of individuals who work in the real estate industry, including brokers and property managers—recently released its 2016 Home Buyers and Sellers Generational Trends Report which examines home-buyer characteristics and patterns from July 2014 to June 2015. According to the NAR, millennials have been the largest cohort of home-buyers for the past three years, making up 35 percent of total buyers.
The report takes a closer look at millennials, revealing that 67 percent were first-time home buyers. This doesn’t seem like much of a surprise since millennials are the youngest generation included in the study, and most of them are under 30 years old. The group with the second-largest number of first-time home buyers included people between the ages of 36 and 50, also known as Generation X. A major reason millennials wanted to buy homes was their wish to own a piece of real estate. After years of either living with their parents or renting, millennials who finally have a place to call their own must feel both proud and excited.
Learning the Home-Buying Process
Using a real estate agent to purchase a home continues to be the most common step that all buyers take because agents can find great properties at affordable prices. The NAR statistics show that most people, no matter their age, work with an agent when they are looking to buy real estate. It doesn’t appear that this will change anytime soon since people can learn more about the home-buying process that way. According to the report, 89 percent of millennials used an agent’s help, though more than 80 percent of Generation X buyers did as well.
Obtaining a Loan for Purchase
Another topic the NAR touched on is what types of mortgage loans each generation received. In regards to millennials, 53 percent used conventional mortgage loans while 29 percent used FHA loans. But buyers from each generation included in the report rely on mortgage loans to finance their new homes. More than 60 percent of those between the ages of 61 and 69 also used conventional mortgage loans.
For many buyers, having the ability to purchase a home would not be possible without the help of a mortgage loan. Similar to working with a real estate agent, consulting with a mortgage loan officer can help buyers learn more about the different kinds of loans available, their individual requirements, and what buyers should do to qualify when they’re ready to move.
Though some millennials are still pretty young, an ever growing number of them are buying homes. It will be interesting to compare their buying habits with those of older generations as time goes by.
