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Why Millennials Are Considering Buying Homes Again

Written by Posted On Wednesday, 26 July 2017 11:54

Why Millennials Are Considering Buying Homes Again

Recently, Bloomberg Business, one of the most influential business magazines in the United States of America, had noted that most young adult in this generation opt to buy a house as opposed to renting. According to the National Association of Realtors, In 2014, about 32% of the US Housing Market comprised of young adults which is a significant improvement from 2012’s 28%.  This number continues to grow now.  

The growing number of young adults who choose to buy instead of rent is mostly the cause of one thing: the rising cost of renting. These days, a decent rental property could go from as low as $800 to $2000 a month. With this being the case, millennial home buyers who are able to pay off certain debts (such as college loans is a huge one) and are steadily raising or maintaining their credit would increase in number this year. Last year, 4.2 million renters around the country had bought homes after renting while this year, a survey shows that about 5.2 million renters are expected to purchase. According to some of these young adults, with the rising rent and real estate interest, they rather pay to build equity.

2017WorstplacetorentIn every popular city it cost more to rent than buy an equivalent home.  Recently, Wallethub tracked the worst places to rent and when you look at only affordability you see some popular places here where you likely can't rent and the cost to buy although high is actually significantly less than rent.

Notoables from this worst place to rent list is Cleveland, Detroit and a whole slew of cities in Florida and California.  

Ultimately the combination of low inventory, rising rents, delayed new construction in both new homes and new high density housing has caused a situation where millenials are rethinking renting as a long term strategy, but it's still no easy answer as prices do continue to rise.  From those we talked to, it was not the "american dream" but rather a feeling of desperation as they wanted to "lock in their rent rate. "

Where Is Rent The Most Affordable?

Scottdale, AZ takes first place, in fact there's a few Arizona cities that have booming real estate markets and yet are still affordable.  Other notables are homes in Plano, TX (at 17 overall), which gets you close to Dallas as well as Orlando homes at 27 overall.  Finally, I did have one person complain that Detroit is getting a bunch of bad press.  They will tell you that a city like Northville is a great suburb that offers convenience to a big city without the costs.  I'm sure if we looked we'd find suburbs like that all over, including my own local backyard in Atlanta.

If you're on the fence about whether to rent or buy, read, 4 Key Questions Renters Must Ask Themselves Before Buying.

What are you seeing in your local market? 

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Joshua Jarvis

Joshua Jarvis is a 15 year veteran of real estate and runs his own real estate team, Jarvis Team Realty in Duluth, GA.  His team is routinely in the top 1% locally and top 2% nationwide with over 100 homes sold every year. A graduate of Georgia Tech, Joshua engineers systems for his team and clients alike.   Joshua love technology and is often asked to teach or speak on the subject of real estate SEO and digital marketing.

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