There’s a new demographic that will greatly affect the housing market in both the near and distant future: Millennials.
Millennials, also known as Echo Boomers and Generation Y, are young adults who were born between 1980 and the early 2000s. This generation – you might be one! – is known for being skeptical, having grown up during an economic boom and then watching it slide into recession.
Contrary to stories seen in the media, 72 percent of Millennials say that homeownership is part of their personal American Dream. In a poll by the Joint Center for Housing at Harvard University, 96 percent of Millennials plan to own a home. Of those polled, 48 percent of those under 25 said that they even expect to buy in the next three to five years.
While this may not seem to have an immediate effect on the housing market, the Census Bureau recently reported that the annual household formation numbers are almost back to pre-2008 numbers, considered the Boom Years. (Between 2008 and 2011, only 650,000 households formed annually). In 2013, Freddie Mac is projecting the creation of 1,250,000 new households, which means an increase in potential homebuyers.
The current combination of great pricing and historically low interest rates have created a flood of first time homebuyers, and data consistently reports that these factors have already begun to encourage a positive change in the housing market. Furthermore, Chicagoland’s listing inventory for February averaged 4.7 months, which is down 51 percent from the 12.9 months in February 2011. This indicates a lack of supply, which encourages increased activity.
On the leasing front, rents are expected to reach record highs in 2013, and 31 percent of current renters plan to buy a home in the next two years. This will bring more buyers to the market during this time and add to an already positive trend.
Whether you’re looking to move up or downsize, now is the time to discuss listing your home and purchasing another at historically low interest rates. If you’d like more information about the best strategy for selling your current property in your specific market or purchasing your first home, I have the expertise to help you make it happen.
Spring has arrived! Let’s go look at some houses together! Let’s do some housing for good. Give me a call.
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