Millenials Prefer Their Dream Home NoW!
Millennials have created a new trend with regards to housing. With high home prices across the country, many first-time homebuyers are choosing not to purchase traditional starter homes and instead focus on moving straight to their dream homes.
What Is A Starter Home?
A starter home is defined by NAR (National Association of REaltors) as a one or two-bedroom home (sometimes a small three bedroom). "Home prices vary market to market, but on average, starter homes cost $150,000 - $250,000 while trade-up and premium priced homes cost upwards of $300,000."
Choosing Forever Homes From The Start
In a recent article from CNBC, it was reported that there were many reasons that older millennials (ages 25-35) chose to delay purchasing a home earlier on. Large schooling costs combined with aftereffects from the Great REcession forced many to choose renting or staying at home with their parents.
As the economy continues to improve, many millennials have been fortunate enough to land better-paying jobs which allowed them to save enough for a larger down payment. As homeownership is no longer a far away dream but a close reality, many millennials are saving up for their perceived forever homes.
Nar's most current statistics reveal 30% of millennials purchased homes priced at $300K or more this year, (up from 14% in 2013). Grant Thornton chief economist Diane Swonk stated "They rented for longer. Now they are going to where they want to stay."
More and more millennials are at that point in their lives where they've decided to settle down, get married and start a family. This has significantly impacted their desire to look for larger homes.
A rise in competition in the starter home market has also been a driving reason to choose waiting to afford their dream homes. Inventory in the starter home market has dropped 14.2% from 2017, per research from Trulia. This drop in inventory has caused prices to jump upward as well as led to bidding wars.
A lot of first-time buyers who started out looking for starter homes have realized that waiting and saving just a little more, they will be able to afford to purchase a trade-up or a larger premium home instead.
If you are a first-time home buyer considering purchasing a home this year, contact me and let's get together to determine how much house you can afford. You may be surprised to learn your dream home is within reach!
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Disclaimer:The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. John Sabia PA and Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. John Sabia PA and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.