Lack of Inventory and Lack of Homebuilder Activity Poses Challenges for Millennial Homebuyers.
As more and more young families get married, have children, and leave the city, the U.S. housing market faces a dilemma it hasn’t seen before – growing demand for homes from Millennials.
The oldest millennials are now 30 or already in their early 30s, and are now hitting those life milestones of marriage, homebuying, car purchasing, etc…
We’ve spoken to many Millennials who’ve sold their homes in cities like San Francisco or New York. They sold their homes for well over asking price, but immediately had trouble finding another home within their new price range.
The problem? Lack of inventory. Housing inventory has dropped for 24 straight months on a year-on-year basis.
Meanwhile, U.S. home-building fell for a third straight month in May to its lowest level in eight months, the U.S. Commerce Department reported last week.
So what are Millennials to do? We think it’s still a great time to buy a house, but you will need to understand the details of your local market.
Mortgage rates rose after last year’s presidential election but have edged down in recent months, even as Federal Reserve President Yellen raised interest rates to a range now between 1 – 1.25%. The average interest rate on a 30-year fixed-rate mortgage was 4.01% in May, down from 4.05% in April, according to Freddie Mac.
Source: Reuters Business News