According to a recent Pew Research Center survey, more adults between the ages of 18 and 34 are living at home than ever before.
Despite the fact that rents are predicted to increase up to 8% and that nearly 95% of renters 34 years old or younger want to own a home, Millennials who do leave home are increasingly renting while U.S. home ownership rates hit a 48-year low in 2015.
The good news for current homeowners is that home values have increased at more than twice the rate of inflation at 4-5%. For Millennials facing record levels of student debt and increasing mortgage rates, the rise in home values makes it even more difficult to secure the standard 20% down payment.
The good news for Millennials is that job prospects are improving and wages are showing signs of increasing which could create a more favorable opportunity to buy. Nearly all young renters want to own a home, even if many are also pessimistic that economic conditions will allow them to, finds a new survey by the National Association of Realtors (NAR).
This all means that there is a large demand, but limited supply, for first time owner properties. A variety of economic and personal reasons impacting potential owners have created this largely untapped demand.
Last year the percentage of first-time buyers fell to its lowest level in almost three decades. First-time buyers fell to 32% of all purchasers in 2015 from 33% last year, the third straight annual decline.
The lack of affordable first time inventory locks many Millennials into renting, while the steady rise of home values and lack of inventory creates a favorable market for current homeowners who wish to sell in the near future.
How likely are you to consider selling or buying a home this year?