This year, it is projected that the millennials will invest significantly in the housing market. They will spend while simultaneously overcoming the high financial restraints and debts that held them back previously.
Reports suggest that the group will take out over half of the new mortgages in the United States. Millennials’ share in this market will exceed that of Baby Boomers, and Gen Xers combined, as documented in Realtor.com’s 2020 Housing Market Predictions.
Baby Boomers will account for 17% of new loans and Gen Xers for 32%, the report projects. Millennials, the biggest generation in US history, have become a point of focus for businesses and economists trying to determine customer demand and trends in the future.
This group has waited longer than their predecessors to enter the housing market, as noted by the founder and CEO of Farvahar Partners, Omeed Malik. Hence, these figures are encouraging. Malik said:
“This is a generation that grew up after the financial crisis, so they have been stifled to start families because of student debt. I am delighted to see that they are coming of age and able to get their first homes and start a family.”
In 2020, up to 4.8 million millennials will be turning 30, considered to be “peak home-buying age.” As the group matures with the oldest members turning 39 in 2020, they are shifting priorities toward affordability while they start to have families.
Older members of this generation are moving from the expensive coastal markets like San Francisco, Los Angeles, and New York. They now prefer the midsized cities where they can enjoy a quality life and amenities at affordable prices.
The migrations will continue this year as millennials look for family-friendly lifestyles and affordable housing. Also, the retiring baby boomers who seek sunnier weather, lower living costs, and lower taxes will drive a similar trend.