Though they are often characterized as renters, people between the ages of 18 and 34 are expected to start snatching up homes. According to a Realtor.com survey, 61 percent of Millennial respondents said that they plan to go house shopping next year.
It won’t be easy for them, though. 24/7 Wall St. reports that Millennials will deal with existing loans (quite often student loans), stagnant wages, stricter loan standards, and rising home prices, all factors that make saving for and paying a down payment and monthly mortgage difficult. Millennials are the largest generation in the country, accounting for more than 75 million Americans.
Nearly 42 million Americans have student loan debt totaling nearly $1.3 trillion (about $30,000 per person). And, loan underwriting standards now require first-time buyers to have a credit score of 745, up from 715 in 2000.
Because home ownership has historically been the single best wealth creator for most Americans and an important driver of U.S. consumer spending, the longer a person delays buying a house the more significant the foregone home-equity creation. Yet homeownership rates for Americans under 35 has dropped from around 44% in 2004 to 34% this year, the largest decline among all U.S. age groups.
