By Nef Cortez
Millennials have now surpassed Baby Boomers as the largest segment of homebuyers. According to a report by the National Association of Realtors (NAR), millennials comprised 38% of all buyers across the US in 2013, surpassing the 32% comprised of Baby Boomers. Since then, Millennials have consistently been the largest segment of the homebuying population. Millennials are defined as people having been born between 1980 and 2000.
The US Census shows that the Millennial Generation is larger than even the Baby Boomers, who were the largest demographic in the history of the United States. The 92 million Millennials outnumber the 77 million Baby Boomers by more than 16%. According to the National Association of Realtors (NAR), the sheer number of Millennials coming into the prime home purchasing years (25 years old to 45 years of age) will continue to grow and the percentage of millennials purchasing a home will also become a larger segment of the homebuying population.
Another factor that is expected to impact the growing number of purchases by Millennials is that they have been putting off moving out of their parent’s homes and/or getting married. The median age for married Millennials was 30 years old here in the 2010’s, where just 40 years ago, the median age was only 23. Assuming the legal marriage age of 18 as the beginning number, the median number of years that marriage has been put off by millennials is 7 years, an increase of 140% in the median years before marriage.
Marriage is seen by most people as a major life event that in many ways drives people toward home-ownership. Seeking stability, gaining privacy, and building equity are seen as reasons to buy versus continuing to rent (not to mention sharply rising rents). As a larger number of Millennials reach the current median age of 30 before getting married (and so far, only 40% of millennials have), this factor will be even more impactful on the real estate market. An overwhelming number, more than 90%, of Millennials age 18-35 who currently rent plan to buy a home some day. That compares favorably with the less than 40 % of Baby Boomers who now plan on buying in the future. That demographic is thinking more of retirement than they are on getting started all over again on a 30 year mortgage.
All indications point to Millennials being the largest driver of the housing market in the next decade.
This article was written by Nef Cortez who is a licensed Real Estate Broker, Ca DRE # 00560181, licensed since 1976. He can be reached for more information via e-mail at email@example.com, or website www.nefcortez.com. Please feel free to email any questions regarding real estate.