Millennials now top mortgage-borrowing generation

Millennials now top mortgage-borrowing generation

SANTA CLARA, Calif., – Feb. 22, 2019 – By dollar volume, millennials now take out more mortgage money than any other generation, according to a study by Realtor.com. They have surpassed both Generation X and the baby boomers.

Realtor.com based its analysis on data about residential mortgage loan originations from Optimal Blue, show that while the median home buying price millennials take on is still lower than that of Generation X or baby boomers, millennials are showing interest in more affordable markets. Additionally, millennials are making lower down payments and taking on larger mortgages when compared to Gen Xers and baby boomers.

“Millennials are getting older, with better jobs and deeper pockets, allowing them to expand their collective purchase power, and hence, their footprint in the market,” says Javier Vivas, director of economic research at realtor.com.

“The stereotype that millennials primarily choose to buy homes and live in large metro areas isn’t the reality,” he adds. “Results show millennials’ expansion is more heavily conditioned by affordability than in prior years, so their eyes are set on less traditional secondary markets where homes and jobs are now available and plentiful.”

Affordability is such a key factor for millennial homebuyers that they’re moving to places previous generations have not, like Buffalo, N.Y., the top affordable market for millennials, according to realtor.com’s study.

Millennials’ increased buying power

Millennials are still primarily in the life stage that requires starter homes. Despite a lower median purchase price ($238,000) than the two generations before them, (with baby boomers and Gen Xers spend an average $264,000 and $289,000, respectively), millennials are increasing their purchase price at a faster rate than previous generations which suggests that they’re starting to move beyond starter homes.

https://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=377363