Millennials, welcome to homeownership

Fran Images--SoldA new study has found the Millennial generation–those born between 1980 and 2000–is not only buying homes, but also feels more confident than any other age group about that financial commitment.

The study, “2013 Home Buyer and Seller Generational Trends,” released by the National Association of Realtors, evaluated generational differences of recent homebuyers and sellers.

The survey found that 85 percent of buyers younger than 32 years old considered their home purchase a good financial investment.

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In a statement, NAR Vice President of Research Paul Bishop said homeownership would allow many younger families to begin to accumulate wealth.

“The oldest of the Millennial generation are now entering the years in which people typically buy a first home, and despite the recent downturn, homeownership still matters to them. The sheer size of the Millennial generation, the largest in history after the Baby Boomers, is expected to give a powerful boost to long-run housing demand, though in the short term mortgage accessibility and student debt repayment remain challenges,” Bishop said.

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Here are some of the study’s other findings about Millennials:

  • Millennials accounted for 28 percent of recent home purchases
  • The median age of Millennial buyers was 28
  • Their median income was $ 66,200
  • They typically bought a 1,700-square foot home that was built around 1986 and cost approximately $ 165,000
  • Millennials’ median down payment was 5 percent of their purchase price
  • Millennials were more likely than any other generation to make more compromises with their home purchase, most often conceding on the price, size of the home and lot, the distance from their job and the style of home they preferred
  • Prior to their home purchase, 65 percent of Millennials had rented an apartment or house and 22 percent had lived with their parents, relatives or friends
  • Eight percent already owned another home and were purchasing a second one, perhaps as a vacation or investment rental
  • Younger buyers generally were more likely to purchase a home in an urban or central city area and tended to stay closer than other generations to their previous residence

A total of 8,501 households responded to the eight-page questionnaire, sent by U.S. Mail in July 2012, to a national sample of 93,502 people who purchased a home between July 2011 and June 2012. All of the information is based off of the 12-month period which ended June 2012, with the exception of income data, which was for 2011, the NAR said.

HSH Associates Financial News Blog

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