Now, that home prices are starting to go up, that’s pricing some millennials (median age 30) out of houses in downtown areas — the part of town that this group tends to gravitate towards. Even monthly rents are rising. In fact, an annual survey done last July by the National Association of Realtors, says just 17% of millennials bought homes in urban or central city areas.
So, cnbc.com says millennials are heading to the suburbs. Many millennials are married with children and want a bigger home. So, moving outside the city makes sense. However, the website says these buyers are still finding it tough to find a home in their price range since the supply of homes for sale, especially at the lower end, are in short supply, even in the ‘burbs. Even homebuilders are building higher end homes to increase their profit.
Millennials, boomers — actually all ages — are plagued by debt, which is another reason they’re looking for homes at the lower end or delaying home buying altogether. The survey says, “the majority of millennials cited student loan debt as a barrier to saving for a down payment, while credit card debt was more of a problem for Gen Xers and younger baby boomers.”
JPMorgan analysts said after the February employment report came out that rising home prices will continue to discourage home buyers until there’s more wage growth. “The desire to own is growing among the millennial generation; 48 percent of those surveyed said it was their primary reason for buying, up from 39 percent a year ago. The desire for a larger home was the highest among Gen X buyers (16 percent), and older boomers (at 20 percent) were the most likely to buy because of retirement,” according to the NAR survey.