Millennials have graduated, are in employment and are poised to take the US housing market by storm in the coming year.
As this new influx of investors is set to skew existing homeowner demographics in 2017, the question is, is the industry ready to cope with the change in demand?
According to a survey from realtor.com in 2016, just 33% of individuals considering a property purchase were first-time buyers. This figure is expected to leap to 50% within the next 12 months, however, and just over 60% of the number will be aged under 35.
Notably, this group has a higher percentage of degree-educated individuals than any generation before, and it’s those who have studied at university that are most likely to invest in property in the near future.
This purchasing spike by millennials will usher in changes to the US housing market. There will be a shift in the type of properties being bought, as well as the areas considered desirable. As single-family homes are the most sought-after type of property for this demographic, affordable starter housing is the sector that will truly feel the heat.
There will be a shift in where millennials are buying, as they swap renting in the city for homeownership in popular suburban locations.
Although metropolitan areas are still the second most preferred locales for this young demographic, reasons for relocating to the suburbs remain similar to preceding generations: for more privacy and safety, as well as additional outdoor and indoor space.
In the meantime, as the baby-boomer generation is no less eager to reside in suburban areas – particularly as they wish to move closer to children and grandchildren purchasing in these locations – competition for housing is increasing with ferocity.
According to data, millennials are not buying blind. Although this savvy group is concerned about finding houses within their budgets and securing down payments, most are viewing their purchase as a sound financial investment.
However, this lower-end squeeze on the market is predicted to result in prospective home buyers postponing their purchase, allowing landlords renting small family-size properties to fill the gap.
With this seismic change about to rattle the industry, the time is ripe for investing in a sought-after suburban location. If you’re house hunting, it’s worth making your move in the US housing market before the annual April rush in order to elude the potential price surge that this unprecedented demand from millennials may trigger.
Whether you’re considering a property to live in, or are aiming to maximise the changes in the industry by purchasing a buy to let, we have a comprehensive network of Engel & Völkers offices in the United States with expert staff on hand to provide advice. Our well-versed advisors are armed with in-depth market knowledge and are prepared to guide you towards investing in the US housing market.