Are First Time Home Buyers Skipping Starter Homes?

Happy Friday all! We hope you enjoyed a short week after Memorial Day and you are fully recovered from the heat and sun from the weekend!

We came across an interesting read this week about the tendencies of millennial home buyers that we thought you would enjoy. The theme of this article? Millennial home buyers are renting longer, and then purchasing homes in the $300K + market in areas that they intend to stay in.

If you recall, a few weeks ago we wrote an article on the money that millennials are spending on rent by the time their 30 in comparison to generations before them - to get more information on how this is impacting their finances, you can read our post here.

What is interesting about the article that we found this week is that many millennials are waiting due to larger education costs.

On the flip side, the article states that many millennials wait because they break into better paying jobs that then allow them to save more. Their savings can go towards a down payment that will later be used to help pay for their dream home.

So how many millennials are buying in the $300,000 plus market? According to NAR, last year, 30% of them did. This is up from 14% a few years prior.

Keep in mind that millennials are also the majority of those on hunt in the market right now, sticking at about 36% of the buying market.

What are we seeing in the market on our end? 

Given that home prices have been a little higher recently, it is not surprising that many home buyers are buying for the long term in a higher price bracket.

We have, however, noticed that many of our buyers, and much of the market, remains in the $175K - $250K market. These are, many times, the millennial market as they are still looking for a starter home.

Many of our buyers in this range are also those that recognize that they are paying as much in rent or MORE on rent than if they just bought a home. Once they buy they are paying down a mortgage and building equity, sometimes used to help pay for a down payment on a forever home in the future.

Are you millennial? What is your plan for buying in the future? To learn more about our team and see what homes may be in your interest, visit our website - here. 

To read the full article from CNBC about Millennials waiting to buy, you can go here.