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The housing market has been very hot in the past year — real estate being seen as a solid investment by many — and driving the demand are members of the millennial generation. In a surprising economic fact, millennials now make up the bulk of those submitting home purchase applications.
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According to the CoreLogic Loan Application Database, millennials made up 67% of first-time home purchase applications and 37% of repeat home purchase applications in 2021.
This represents the largest share of home purchase mortgage applications coming from millenials since 2016, with the demographic accounting for 51% of home-purchase mortgage applications in 2021. This uptick represents an increase of five percentage points from 2019, according to CoreLogic.
From ‘Generation Rent’ to Becoming Homebuyers
Deidre Woollard, real estate analyst at The Motley Fool, told GOBankingRates that “so much was made of millennials being ‘Generation Rent’ and how that would change housing.”
“Instead, they were just a little bit later than previous generations and they are now the biggest force in housing,” she said. “However, the fact that they started later does mean that they’ve missed out on some of the boost to personal wealth that equity in a home can provide.”
David Russell, VP of market intelligence at TradeStation Group, agreed.
“The shift toward renting wasn’t a trend. It was just a delay of the inevitable,” he told GOBankingRates. “All these predictions about being permanent renters didn’t look at the demographic realities of people growing up. Three things distorted the picture pre-Covid: student debt, the hangover of subprime and the revival of great cities like New York. Now those forces are losing relevance and the demographic realities are catching up,” he added.
While millennials have more buying power in affordable markets compared to high-cost areas, the data shows their share is much higher in some high-cost metros as well — especially areas with high-tech job opportunities, per CoreLogic.
Related: How Aspiring Homebuyers Can Build Financial Confidence in the Current Climate
The data finds that millennials made up a higher share of the potential homebuyers in the Midwest markets and in metros with high-tech job opportunities. For example, San Jose, California, had the highest percentage of millennials applying for a home mortgage at 64%, followed by Austin at 61%, Seattle at 61%, Pittsburgh at 61%, and Boston as well as San Francisco at 60%.
In addition, Salt Lake City, Milwaukee, Minneapolis and Buffalo were also among the 10 metros with the highest percentage of millennial applicants. These metros with the highest share of millennial …….
