Photo: Nelson Minar
More and more American Millennials are buying homes, and when they do, they’re increasingly looking to the suburbs, suggests the latest annual study from the National Association of Realtors (NAR).
Of all 6,406 recent homebuyers surveyed, 35 percent were Millennials, which was the largest share of any age group, and a three-percentage-point boost over 2014, according to NAR.
For comparison, 31 percent were boomers, 26 percent belong to Gen X, and 9 percent were part of the Silent Generation.
Meanwhile, the share of Millennial homebuyers purchasing urban properties fell four percentage points to 17 percent, according to the survey.
NAR’s study is based on responses to a questionnaire sent to homebuyers who purchased their primary dwelling sometime between July 2014 and June 2015.
Millennials are also shifting away from units in multi-family developments, the survey suggests, as 10 percent of these younger respondents bought homes of this type, down from 15 percent a year earlier.
The realtor organization defines a Millennial as someone aged 18 to 35.
Buying a home comes part and parcel with other life milestones, a statement from NAR Chief Economist Lawrence Yun suggests, and this could explain the increasing rate of ownership among this demographic.
“The median age of a Millennial homebuyer is 30 years old, which typically is the time in life where one settles down to marry and raise a family,” says Yun.
It’s not necessarily that Millennials have a newfound love for suburbia. Instead, Yun suggests tight market conditions in US urban centres are encouraging young homebuyers to look elsewhere.
“Even if an urban setting is where they’d like to buy their first home, the need for more space at an affordable price is for the most part pushing their search further out,” he says.
“Limited inventory in Millennials’ price range, minimal entry-level condo construction and affordability pressures make buying in the city extremely difficult for most young households,” adds Yun.
For Millennial homebuyers, the median annual income was $77,400, slightly more than in 2014 when it was $76,900.