Owning a home has been part of the American Dream for decades, and it is one of the biggest investments many people plan for in their lifetime. When home prices and interest rates go down, demand increases as people flock into the housing market to purchase a new home. However, there is one demographic that isn't necessarily setting its sights on the milestone of homeownership right away even in today's low interest rate environment.
In fact, more Millennials are delaying the purchase of their first home. But why? Read on to find out more about what's keeping this group at home with their parents and why they aren't buying homes at the rate of previous generations.
Anything above that suggests they cannot afford the home. This means buying a home will not be as easy for Millennials as the affordability gap widens between home values and income levels. In , the index was An index value of means that a family with a median income has exactly enough income to qualify for a median-priced home. The index is an average across the U. The question is whether or not Millennials are willing to relocate and leave jobs, friends, and family in order to buy a home.
In fact, people now are getting married later, with the average marriage age at Census Bureau. Meanwhile, the average age of a first-time mom is 26, according to the Centers for Disease Control CDC , though the age increases for college-educated women and women in urban areas. The changing dynamic of getting married and having children means Millennials are staying at home with family longer and delaying the purchase of their first home.
The longer this age group lives with parents or independently, the more homeownership will be delayed," stated Bank of America in a report about Millennial home buying trends. Getting married later in life and delays in having children are helping increase the percentage of Millennials living at home or with relatives to As such, it's now become a burden on Millennials trying to enter the housing market. This same group is also contending with stingy wages and raises in much of the job market, putting added strain on paying off those loans.
