Real Estate News

Millennials eager to buy, but boomers aren't eager to sell

Published: 22 Aug 2017

Over the past few years, one of the biggest issues housing market experts have cited when it comes to relatively slow sales numbers has been the lack of millennial participation in the homebuying process. However, that has begun to change more recently, with young adults exhibiting massive demand for homes but not actually being able to buy them.

A significant component in lagging millennial homeownership is that there just aren't a lot of properties on the market these days, and that's something that may not change particularly soon, according to Realtor.com. That's because nearly 3 in 4 baby boomers who currently own homes say their current houses fit their needs, and 85 percent of those people say they therefore have no plans to sell within the next year.

Problematically for would-be buyers, that severely constricts the potential inventory of homes for sale, since boomers currently own about 33 million properties that aren't likely to hit the market any time soon, the report said.

Young people want to buy, but the opportunities just may not be there for them.Young people want to buy, but the opportunities just may not be there for them.

Millennials drive the sellers' market too?
In fact, just as millennials are now the largest portion of would-be buyers on the market, by far, they also dominate as sellers, the report said. Indeed, 60 percent of all people who plan to sell their homes in the next year are under the age of 35. Meanwhile, boomers make up only 5 percent of that group.

It should come as no surprise, then, that young people aren't exactly feeling optimistic about their chances for getting into the buyers' market soon, according to a separate loanDepot survey. While more than half want to own homes, only 18 percent think it would be affordable for them (thanks in large part to surging prices).

To that end, 63 percent don't think they'd be able to put the money together for a down payment, and 48 percent say they wouldn't know where to begin, the survey found.

"It's clear from the survey results that millennials have a lot of anxiety built up about the home-buying process," said David Norris, loanDepot's head of retail lending. "There is good news, however, as there's more flexibility than most millennials think regarding how to qualify for a loan and what's needed for a down payment."

Adjusting the market
Due to these concerns, and others related to the current inventory issue, more builders are shifting their focus to smaller properties in particular, according to the Philadelphia Inquirer. Especially around urban areas with large groups of millennials, the popularity of tiny homes and "micro" condos and apartments is on the rise, though experts now see similar issues cropping up here when it comes to extreme demand for what is still a rather limited supply.

The more consumers can do to get into the market as soon as possible - before rates and prices can rise even more sharply than they already have - the better off they will be in terms of being able to afford a home loan. That, in turn, can reduce mortgage risk going forward.