Rising home values are making it hard for millennials with steady jobs to enter the housing market. Some millennials were able to enter the housing market as low mortgage rates and rising pay converged to make it possible. However, many experts believe the door is shutting rather quickly on the under-35 home buying crowd.
An Overcorrected Market Leads to Millennials Left Renting
From 2009 to 2017, many believe the real estate market went through a severe overcorrection due to the fall of the market in 2008. Steady price increases have caused many millennials to be stuck as renters with very little light at the end of the tunnel.
While prices were low, millennials couldn’t take advantage due to huge student loan debts and the lack of stable, good-paying jobs during the Great Recession. During this time, it was also harder for millennials to obtain a decent mortgage.
Millennials Enter the Housing Market
When 2017 rolled around, houses for sale in Mint Hill, NC and all across the nation were finally available for millennials. Many of the under-35 home buying crowd jumped into the market due to growth in good-paying jobs and new home construction. During this year, sales for millennial buyers rose quite a bit.
Biggest Group of Buyers Now Getting Priced Out
Millennials represent the biggest group of potential homebuyers right now and they are starting to get priced out, once again. With home prices skyrocketing in many areas of the country, millennials are finding they are stuck renting, again.
For example, a decade ago, it may have been possible to find a decent-sized home for sale for around $150K in a major city, such as Las Vegas, NV. However, that same house costs more than double today.
Home sales are shifting back towards the more affluent buyers that have held higher-paying jobs for decades. The other major problem keeping prices from dropping into the range of most millennial buyers is the tight supply of homes.
Millennials are Not Moving On Up, Either
Another thing we are currently seeing with the millennial buyer is they are not moving up the housing ladder. It used to work a bit differently; a first-time buyer would choose a starter home and move up the housing ladder as their income increased and their family grew.
The millennials that qualified for a good mortgage in 2016 and 2017 are not showing interest in moving up the housing ladder. Instead, they are content with keeping their low monthly payment and staying in their current home.
A big part of this situation is due to the fact that millennials are currently getting priced out of the market. Those renting are remaining as renters and those who already bought are staying put. Some experts believe working with cities to build smaller, high-density housing would help regulate the market and offer something more affordable for millennial buyers.
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