Housing prices may seem astronomical, but millennials are buying in. The young people who once seemed doomed to rent can afford more house than earlier generations at their age, thanks to high incomes and low mortgage rates.
, accounting for more than half of all home-purchase loan applications last year.
But most housing analysts don’t expect a wave of sustained home price cuts for quite a while. They say the pandemic and the emergence of remote work accelerated millennial home-buying trends already under way. Young families living in apartments decided to buy houses in the suburbs or leave expensive cities for cheaper ones. Millennials who already owned homes traded up for more space.
Some real-estate brokers also theorized that millennials preferred to rent and spend money on travel and experiences rather than buy houses. “We talked for years about how millennials preferred to ‘do’ rather than to ‘have,’ ” said Richard Ruvin, a Realtor at Keller Williams Milwaukee North Shore in Wisconsin.
The main challenge for millennial home buyers, Mr. Fleming said, isn’t whether they can afford to buy a house but whether they can win a bidding war. The frenzied market this year has made it. First-time buyers often lose out to all-cash buyers or investors buying to flip or rent out the homes. Mariel and Matt Balaban, who are 35 and 36, respectively, were happy living in rental apartments for years, but having children changed their perspective. When the pandemic struck, Mrs. Balaban was pregnant with their second child, and they decided to move from California to Pennsylvania to be closer to Mrs. Balaban’s parents. After touring more than 30 homes, the couple had their fifth offer accepted this spring on a four-bedroom house in Wayne, Pa.
In the first eight months of the year, millennials comprised the highest share of purchase mortgage applicants in San Jose, Calif., Austin, Texas, and Seattle, all metro areas with a high number of tech jobs, according to CoreLogic. Millennials also accounted for more than half of applicants in more affordable markets such as Pittsburgh, Milwaukee and Buffalo, N.Y., CoreLogic said.
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