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One thing we know for certain about the real estate market is that it is never going to stay the same for long. Today we want to talk about an interesting trend we’ve noticed in real estate: millennials are waiting longer to purchase their first homes than their parents did.
The typical first-time buyer now rents for an average of 6 years before buying a home, which is up from 2.6 years in the early 1970’s, according to Zillow.
We came across this great video from CNBC. I will give you my three biggest takeaways from the article.
1. Down payments are a huge factor
Renters in today’s market are struggling to save for down payments and qualify for mortgages. Most first-time buyers still depend on personal savings for at least some of their down payments, but rising rental prices have complicated the task of socking away money for a down payment.
2. Rising rental rates are complicating things as well
Rental rates are causing 46% of renters aged 25-34, to spend more than 40% of their incomes on rent, up from 30% a decade earlier.
3. Job security is important to millennial buyers
The Money Source, a mortgage lender, examined applications from 5,404 millennial buyers and found that these buyers averaged nearly 4.5 years in their field of work and had held their current job for slightly more than three years. Those figures point to how critical career stability is to a younger generation.
