Millennials Effect On The Market

At Century 21 Blue Marlin, we are encouraged to see the housing market continue to strengthen. In large part, we can attribute the incline to millennials and first-time home buyers. Today’s loan options for this portion of the buyer pool are abundant, including some that require no money down!

According to Ellie Mae, a software company that analyzes mortgage data, millennials are the largest group of homebuyers. At the beginning of 2017, millennials represented around 45% of all purchased loans, up from 42% year-to-year.

Such factors as the financial crisis, tougher lending policies, as well as student loan debt have all contributed to delayed home buying activity by millennials. A majority of this segment of the population have delayed “major life events” such as buying a home, but that could be about to change — and this might have a major impact on a housing market that is struggling to meet current demand.

Currently starter homes, which are favorable to first-time homebuyers, are in short supply. In fact, when doing our research, we found 5 single-family homes in Destin available for purchase under $250,000.

When it comes to calculating the effect of millennials and first-time home buyers on the market, lower inventories plus high demand equal declining affordability. With fewer homes for sale, and more aging millennials ready to enter the home market increasing demand, home prices are on the rise.

Another factor attributed to millennials and first-time buyers comes down to education. The Federal National Mortgage Association, commonly known as Fannie Mae, determined there was a correlation between higher education and higher annual salaries. Higher education and salary gains could make homeownership more accessible to some millennials, which might in turn raise the millennial homeownership rate by 1.5 percentage points in the next 20 years.

While the term “millennial” is often times seen as a demeaning, the generational segment has a real ability to affect the market if they hit the books! For first-time buyers looking to become homeowners this year, it’s important to do your homework. First determine your budget, then prioritize your requirements and finally get pre-approved for a loan. While millennials may be living in a tighter lending environment than those before them, they do have one major advantage –  low interest rates.

Having been in our industry for nearly a decade, we’ve worked with all generations at Century 21 Blue Marlin. It’s our company mission to enable Century 21 Blue Marlin agents to provide best-in-class brokerage services to all who aspire to buy and sell real estate throughout Florida’s Emerald Coast. For more information, please call (850) 837-7800 or visit C21BlueMarlin.com.