Based on polls of its site users, the National Association of Realtors says the housing market is on track to enjoy one of its best years since 2006, despite slow indicators earlier in the year, and positive millennial sentiment is adding to the momentum.
In the first half of June, realtor.com saw visits and mobile applications by older millennials, those between 25 and 34, looking to buy a home increase to 23%, up from 21% in January.
In mid-June, it also observed that the share of visitors looking for rental property had decreased to 20% from 26% in January.
Realtor.com said its survey data was based on a daily representative sample of site visitors. This analysis examined more than 12,000 responses from Jan. 1 through June 15.
Older millennials are not only looking; many also intend to purchase a home.
In mid-June, 65% of 25- to 34-year-old site visitors in a poll said they intended to buy a home within three months, up from 54% in January.
Moreover, older millennials and first-time buyers expressed optimism about buying. The survey found that both groups were slightly likelier than the average buyer to say that they were “very likely to purchase within the next 12 months.”
Jonathan Smoke, realtor.com’s chief economist, said first-timers were critical to the health of the market.
“Historically, they’re the largest demographic of home buyers and can have a dramatic impact on housing,” he said in presenting the new findings at the recent National Association of Real Estate Editors conference.
Smoke said the first-time buyer market share fell to 27% last summer, citing National Association of Realtors data. This year, the first-time buyer demographic is strengthening.
“As the economy continues to grow over the next few years, we can expect first-timers to return to a healthy level of 40% of the market,” Smoke said. “A return to that level would add approximately 15% to the number of total homes sold.”
In the first half of 2015, according to realtor.com, market challenges and lack of affordable inventory held millennials back. Forty-one percent of older millennial home buyers said they “have not yet found a house that meets their needs” as the biggest factor holding them back from a purchase.
Other reasons they cited were difficulty finding a good house within budget, not spending enough time looking, needing to improve credit score, lacking a down payment and currently being in a lease.
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