Millennials Flock to the Housing Market Despite High Costs
High mortgage rates are keeping many would-be homebuyers from purchasing a home, but that’s not necessarily the case for Millennials. According to a recent survey from Realtor.com, Millennials are the only generation that have seen interest in buying a home grow over the past six months.
Nearly one in four Millennials said they plan to move ahead with a home purchase in the next six months regardless of economic uncertainties. Compared with data from Realtor.com's September 2024 survey, the share of Millennials interested in purchasing a home has grown from 15% to 23%.
Not all generations feel the same about buying a home
About one-third of prospective buyers surveyed by Realtor.com say they have delayed buying a house because of the high mortgage rates, which is consistent with September 2024 data. Generation Z is the most cautious. Of those surveyed, 25% of Gen Zers say they strongly agree that high mortgage rates are keeping them from buying a home.
Many older buyers felt less strongly than Gen Z, with 41% of Baby Boomers saying that mortgage rates don’t impact their homebuying decisions. However, 63% of Boomers still say they would like rates to be below 5% before buying a home.
Millennials are going all in, but that doesn’t mean affordability concerns have gone away
- The $1M Starter Home Is Becoming More Common: It’s not uncommon for first-time homebuyers to spend $1 million on a starter home. The number of cities with starter homes that cost at least $1 million has grown from 85 to 233 cities in the last five years.
- Homeownership Rates Stagnate for Younger Generations: As home prices rose, homeownership rates among Millennials and Gen Zers fell in 2024.