Millennials Growing In Importance As Homebuyers
Millennials made up a higher share of the potential homebuyers in the Midwest markets and in metros with high-tech job opportunities.
Millennials are growing in importance as homebuyers says a new report from CoreLogic.
The demographic, people born between 1981 and 1996, accounted for 51% of home-purchase mortgage applications in 2021, up five percentage points from 2019 and 13 points from 2016.
Nationally, they have made up 67% of first-time home purchase applications and 37% of repeat home purchase applications this year.
However, these numbers can vary by geography, CoreLogic notes, with millennials generally showing their strongest presence in areas with affordable homes, good employment opportunities, flexibility to work remotely, local tax rates and open spaces.
CoreLogic finds that millennials made up a higher share of the potential homebuyers in the Midwest markets and in metros with high-tech job opportunities.
San Jose, Calif., had the highest percentage of millennials applying for a home mortgage (64%), followed by Austin (61%), Seattle (61%), Pittsburgh (61%), Boston (60%) and San Francisco (60%).
Lately, the opportunity for high tech jobs has been more critical for this age group compared to lower home prices, Some high-cost metros such as San Jose, San Francisco and Seattle that offer high-tech job opportunities experienced a higher increase in millennial share over the two-year period. In contrast, affordable metros such as Pittsburgh, Salt Lake City, Milwaukee and Buffalo experienced only a small increase in millennial homebuyer share.
At the bottom of millennial presence, metros in Florida and Arizona had the lowest percentage of millennials applying for a home mortgage with Miami and Las Vegas at the very bottom (43%), followed by Orlando (44%), Tampa (44%), Phoenix (45%) and Jacksonville (45%).
In July, CoreLogic warned younger millennials could be shut out of the home buying market by higher prices and the challenge of having sufficient savings for a down payment, closing costs and cash reserves.
“As we look to the balance of 2021, we expect price rises to continue, which could very well push prospective buyers out of the market in many areas and slow home price growth over the next year,” Frank Martell, president and CEO of CoreLogic said.