COVID-19’s stay-at-home orders, and the record-low mortgage rates brought on by the pandemic, have catapulted the countries largest demographic (millennials) into a position to set trends in the housing market for the foreseeable future. The record-low mortgage rates are self-explanatory, but millennials were able to reduce costs and save over a year, as most things were closed. Of course, that doesn’t mean that every millennial saved enough for a down payment on a home, and there are still plenty of barriers to entry.
For starters, the vast majority of millennial home buyers (beginning in March 2020) experienced hurdles they didn’t expect; these obstacles included extended time finding a home they wanted because of low inventory, submitting multiple offers on homes they liked because of the fierce competition for limited homes, exceeding their budgets because of that competition, and ultimately were forced to purchase less desirable properties.
Four-out of ten millennial home buyers spent six months or longer in search of their home, and nearly six in ten visited at least 20 homes during their search. Given the record low inventory, the homes available were being pursue by multiple people, driving the sales price higher. In fact, two out of three millennial home buyers put in at least 4 offers prior to getting a home, and three in five went over budget when making the winning bid. Given the state of the market, millennials were also forced to purchase sub-par homes, with nearly six in ten millennial buyers purchasing homes that required substantial repairs or renovations.
Notwithstanding he numbers above, it is important to keep in mind that the millennial generation will be driving housing market trends for the foreseeable future, and it would be prudent to stay informed of what that demographic is seeking as more of them enter the market.
At the Chernov Team we understand that knowledge is power, and knowledge of market trends and development is powerful knowledge indeed. At the Chernov Team we know that whoever comes to the table most prepared leaves with he most, and the Chernov Team always leaves the table with the most.