The time has come that the Millennials have burst into the housing market and now leading in several categories. Considering the Millennials are getting older, making more money, and have deeper pockets, it is not a shock that this generation is taking over the housing market and scooping up new homes. According to Realtor.com, the Millennials finally surpassed Generation X as the key leaders accountable for the newest mortgages in January of 2017. Their market share has continued to rise since then and shown above by the end of 2018 controlling 45% of new mortgages closed.
Millennial’s also took over the top percent of new loans by dollar volume leaping over Generation X in November 2018. These young professionals are now settling into better careers giving them the funds to increase their purchase power and presence in the housing market taking on larger mortgages compared to Generation X and the Baby Boomers.
There has also data that shows a decrease in down payments by the Millennial’s compared to Generation X and the Baby Boomers. This may be due to several Millennials are first time home buyers and do not possess the type of equity the other 2 groups may have from selling a prior home. The average down payment for Millennials in December 2018 was only 8.8%.
Millennials are looking for homes in areas where their dollar will stretch more as opposed to residing in large metro areas. They are targeting areas where affordability is attractive with a strong job market, which increases their buying power. Needless to say, the Millennials are a key contributor to the success of the real estate market not only in the United States, but especially here in Northern Michigan.