If it seems like all your friends are buying a house… it’s because they are! But don’t worry, you’re not alone if you haven’t. There has been a lot of talk about how, as a generation, millennials have ‘failed to launch’ into adulthood and have delayed moving out of their family’s home. What doesn’t seem to be mentioned in the same context, however, is the large number of millennials who have moved out of their family’s home, but have been renting an apartment, condo, or even a house! Many experts have looked at the homeownership rate among millennials and have questioned if they even want to own homes! The great news is that not only do millennials want to own… they are flocking to the real estate market in larger numbers every year! Buyers aged 18-34 years have comprised the largest share of first-time homebuyers at roughly 50- 60% for the last few years. In 2017, buyers aged 25-34 years accounted for 65% of first-time home buyers, compared to 50% in 2005. According to the National Association of Realtor’s latest Profile of Home Buyers and Sellers, the average age of a first-time home buyer in 2017 was 32. This generation will continue to be the topic of conversation A LOT when it comes to housing as more and more enter ‘average home buying age’.
Experts Need To Stop Lumping All Millennials Together
In a group of people with such a wide age range (18-36 according to the Census), it is impossible to draw conclusions about this generation as a whole, despite what many have tried to do. Many experts have begun to realize that there is a noticeable difference between the behaviors and experiences of this generation, and have therefore divided them into ‘young millennials’ (18-26) and ‘older millennials’ (27-36).
No matter which group you find yourself in, you no doubt have peers that fit into the other category and may even identify with different characteristics from each group.
One of the many reasons that it has been easy for experts to lump all millennials together is the fact that 66% of millennials are under the age of 30, with 22% falling under the age of 25, according to a study by NerdWallet.
With the majority of the generation still in their 20s and either not ready to or not in a position to make huge life-changing decisions (such as buying a home or starting a family), it has been easy for those who follow trends to not notice the progress ‘older millennials’ have already made.
The ‘Responsibility Zone’ Is Calling
Whether pushed into the zone or a willing participant, many ‘older millennials’ are aging into the ‘Responsibility Zone,’ or the age range when responsibilities start to dictate behaviors, such as:
• Moving out of the house
• Getting married
• Buying a home
• Having children
And not necessarily in that order! You may have noticed that many of your friends and family members have started to make pretty big decisions all at once. There are many millennials who are crossing all four of these major life events off their list in a two-year span. If you blink you might miss it!
Over the last 60 years, the median age of first marriage for Americans has increased substantially. The graph below shows the percentage of each generation that was married between the ages of 18-33. This age range fully encompasses the millennial generation and you can see the drastic difference in the percentage that has married by age 33. The Silent Generation led the way with 65% married by this time. The graph on the lower right was created using data from the Census Bureau. It shows that in 1955, the median age for men to be married was 23 and for women, 20. In 2017, men were 30 and women were 27 at first marriage. Even though this difference doesn’t seem very large, (only 7 years), the resulting delay, or ‘failure to launch’ into adulthood, can be felt in the homeownership rate as well as other areas of the housing market.
Simply put, the homeownership rate is the percentage of homes that are owned by their occupants. The homeownership rate is computed by dividing the number of owner-occupied housing units by the total number of occupied housing units. As the economy has recovered from the housing market crash, more and more young professionals are moving out of their childhood homes and opting for a place of their own. At the same time, many who were impacted by the shake-up in the economy are beginning to rebuild their credit to a point where homeownership may again become an opportunity. The current homeownership rate for all Americans is around 64.2%.
Regardless if you are buying or selling, Cara Realtors is dedicated to providing the highest caliber of exclusive Real Estate Services to all of our clients. Contact us today.
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