Now, more than ever, the real estate market is under the microscope. At a glance, it would be easy to assume that the 2008 financial crisis and housing market upset, combined with the relatively weak economic recovery that followed, has discouraged would-be homeowners. The housing market may have experienced a rebound from recession lows, but horror stories about illegal foreclosures still make headlines.
As recently as June, Bank of America (NYSE:BAC) was accused of deliberately denying eligible people for loan modifications, as well as lying to them about the status of their mortgage payments. Former bank employees allege that the firm incentivized employees to push people toward foreclosures through cash bonuses.
Stories like this aren’t rare. Since 2012, 18,000 home shave filed complaints to the Consumer Financial Protection Bureau about Bank of America alone. Foreclosure activity has declined recently, but the damage has far from healed.
With all this common knowledge, many economists expected interest in home ownership to decline, particularly among millennials — the newest generation hitting home-ownership age. But studies conducted by Realtor University and the National Association of Realtors have found that the housing bubble and recession have actually made millennials (also known as Gen Y, those born between 1980 and 2000) more likely to buy a house.
“Homeownership is an investment in your future, and is how many younger American families begin to accumulate wealth,” commented Paul Bishop, NAR vice president of research, in a July 9 statement. “The oldest of the Millennial generation are now entering the years in which people typically buy a first home, and despite the recent downturn, homeownership still matters to them. The sheer size of the Millennial generation, the largest in history after baby boomers, is expected to give a powerful boost to long-run housing demand, though in the short-term, mortgage accessibility and student debt repayment remain challenges.”
So how do recent Gen X and Gen Y home buyers stack up? Here’s an overview from the inaugural 2013 National Association of Realtors Home Buyer and Seller General Trends report:
|Gen X (born 1965 to 1979)||Gen Y (born 1980 to 2000)|
|Share of recent purchases||31%||28%|
|Median age of purchase||39||28|
|Average size of home purchased||2,100 square-foot||1,700 square-foot|
|Average price of home||$235,000||$165,000|
If you’re interested, here is the full inaugural 2013 National Association of Realtors Home Buyer and Seller General Trends report.