One thing we know for
certain about the real estate market is that it is never going to stay the same
for long. Today we want to talk about an
interesting trend we’ve noticed in real estate: millennials are waiting longer
to purchase their first homes than their parents did.
The typical first-time
buyer now rents for an average of 6 years before buying a home, which is up from 2.6 years in the early 1970’s, according
to Zillow.
Here are three reasons why:
1. Down payments are a huge factor
Renters in today’s
market are struggling to save for down payments and qualify for mortgages. Most
first-time buyers still depend on personal savings for at least some of their
down payments, but rising rental prices have complicated the task of socking
away money for a down payment.
2. Rising rental rates are complicating things as well
Rental rates are causing
46% of renters aged 25-354, to spend more than 30 percent of their incomes on
rent, up from 40 percent a decade earlier.
3. Job security is important to millennial buyers
B buyers average nearly
4.5 years in their field of work and have held their current job for slightly
more than three years. Those figures point to how critical career stability is
to a younger generation.
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