Buying a New Home: Why It’s Becoming a Dying Dream for Millennials
The average homebuyer in the U.S. is now older, as more millennials are pushed out of the housing market.
New findings in the National Realtors Association’s 2022 Profile of Home Buyers and Sellers revealed that the average first-time buyer is 36 years old, up three years from last year. The average age of the repeat homebuyer is now 59 — both all-time highs. The share of first-time buyers also fell by 26%, which USA Today noted was the lowest level since the NAR began collecting data more than 40 years ago.
The rate of homeownership for millennials also lags behind older generations. As GOBankingRates previously reported, the homeownership rate for millennials stands at 48.6%, which is over 20 percentage points lower than Gen X and nearly 30 below baby boomers, according to Census data.
Millennials represent the largest chunk of first-time buyers, but Wealth of Geeks reported around 70% of millennials say they cannot afford a home due to rising mortgage interest rates, home prices and debt. A recent report from Unison also showed it can take nearly 15 years to save up for a 20% down payment on a median-priced home if you make a median income. According to NAR data, the median national list price was $425,000 in October.
“Those who have housing equity hold the cards and they’ve fared very well in the current real estate market,” said Jessica Lautz, the NAR’s vice president of demographics and behavioral insights, USA Today reported. “First-time buyers are older as a result of saving for down payments for longer periods of time or relying on a generational transfer of wealth to propel them into homeownership.”
Interest rates are expected to rise even more after the Federal Reserve’s 0.75 percentage point interest rate increase to help fight inflation. Fed Chair Jerome Powell said on Nov. 2 that the housing industry is “significantly impacted” by hikes, USA Today added.
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