Throughout 2017, Millennials pushed the national homeownership rate up. In the first quarter of 2018, their homeownership rate declined from its previous three-year high.
Cheryl Young, a senior economist at Trulia, says that most buyers looking for starter homes are Millennials, "a portion of the market that saw inventory plummet 14.2 percent and prices leap nearly 10 percent year-over-year in Q1 2017." She adds that the influx of Millennials and Gen Xers from renting into the homebuying market is "a boon for new construction." CNBC reports that home builders are shifting some projects to the more affordable end of the market spectrum, but the focus remains on move-up and luxury homes.
Vacancy rates are down for both owned properties and rentals, meaning there will be no easing of today's high rents, which should be another impetus for renters to become homeowners. But those high rents make it hard for young buyers to save for a down payment. And mortgage rates are continuing to move higher. The average rate on the popular 30-year fixed averaged 4.58 percent for the week ended April 26, up from 4.47 percent the previous week and 4.03 percent the same week one year ago.
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