Millennials are often judged for not being as financially responsible as all other generations but are recognized as being highly educated. In fact, Millennials are on a path to becoming the most educated generation in United States history.
This education, while great and should reap dividends down the road, has contributed to Millennials’ increasing student loan debt. Although the buying demand is there, student loan debt in addition to credit card debt has dramatically affected their financial confidence and in turn, their willingness to purchase a home.
According to a Zillow report which surveyed Millennial renters from 20 of the largest housing markets, 10% of all Millennial renters would like to buy a home within the next year. If all of these renters were to utilize financial and government programs to purchase, there would be more than 4.2 million first time home buyers. In other words, homeownership rates could be boosted with the many programs that are out there.
However, with a housing availability shortage due to bottled up demand, will Millennials get the opportunity to purchase once their confidence is back? The National Association of Home Builders predict normalcy in the housing market by the end of 2015 which gives Millennials the opportunity to correct the blemishes on their credit, save and potentially purchase.
What do you think the state of supply will be in 2015? Will supply and demand be on equal grounds by then or will we continue to see supply shortages in the future of the real estate industry?
Resources:
Mortgage News Daily. “The Connection Between Financial Literacy, Millenials, and First Time Home Buyers” 24 April 2014. http://www.mortgagenewsdaily.com/channels/pipelinepress/04172014-financial-literacy-millennial.aspx
DS News. “2015 HUD Budget Proposal Reveals New Fee, Program” 24 April 2014. http://dsnews.com/2015-hud-budget-proposal-reveals-new-fee-program/#at_pco=smlwn-1.0&at_si=5356b451270d7e21&at_ab=per-1&at_pos=0&at_tot=1
MSN Real Estate “Buyers face housing shortage” 25 April 2014 http://realestate.msn.com/blogs/post–buyers-face-housing-shortage