It may come as a surprise to some, but millennials are currently the largest class of homebuyers in the market. This young, tech-savvy generation is still set on finding a home, even during a volatile market with rising interest rates and a decreasein the number of homes on the lower end of the market.
“What we’re seeing is they’re definitely entering the market,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae, a software company that processes almost 25 percent of U.S. mortgage applications. In an interview with MBANow, Tyrell said, “Typically they’re doing it in areas where there’s a good inventory of affordable housing.”
The younger generation may understand the value of owning a home versus renting. RENTCafé reports that millennials, on average, spend nearly $93,000 on rent by the age of 30. This might make home buying a more attractive option for them.
“You are building equity, which can turn into money in your pocket, versus paying rent and never getting a return on the investment,” said Jessica Glenn, a loan officer at Primary Residential Mortgage Inc.
While millennials are largely avoiding purchasing homes in urban areas, industry analysts are also noticing an uptick in home sales in the more expensive regions.
“Even in the major metropolitan areas — the highly populated urban areas — we’re starting to see the millennials increase the percentage of homebuyers,” Tyrrell said.
Many mortgage companies offer easy-to-access online digital loan applications. Millennials are taking advantage of these fast and easy mortgage approvals and mortgage companies are working hard to cater to this rising tech-hungry generation.