Millennials comprise the largest group of home buyers as they account for 34% of that population in the U.S., according to the National Association of Realtors (NAR).
The increasing number of young adults seeking to buy homes takes place as prices for properties reach an all-time high. For those not planning to buy homes at the moment, some alternative options are section 8 rental investments and multifamily properties in the real estate sector.
The housing market in Ogden-Clearfield, Utah, emerged as the most popular place for millennial home buyers, as 51% of the demographic own properties in that area, according to an ABODO study. On the other hand, only 17.8% of millennials own houses in the Los Angeles-Long Beach-Anaheim market in California.
The study cited high prices for Los Angeles homes to be the clear reason behind the small percentage of ownership, not to mention the amount of savings and time required to afford a down payment.
Millennials with median income will need to save 15% of their earnings per year for 32.2 years, just to pay a 20% upfront fee on a $112,033 house in Los Angeles, according to the study. By contrast, buyers will only need to save for 6.9 years to afford a 20% down payment in the Youngstown-Warren-Boardman market in Ohio-Pennsylvania.
This trend apparently created disproportionate home purchases among millennials in cheaper markets compared to more expensive places. However, homeowners under 35 years dropped five percentage points between 2001 and 2015, despite a relatively strong buying activity in some regions, according to the study.
The decision of buying versus renting homes ultimately lies in your plans. Do you plan to marry and have children soon? Perhaps, you only look to buy houses to sell them for a profit later? The answers to these questions will help you in making up your mind.