ST. LOUIS, Mo._ A new study from real estate information provider, Adobo says St. Louis is a top 10 metropolitan area for millennial home ownership. Millennials represent the largest share of the home buying population.
Peter Lazaroff from Plan Corp joined us in the FOX 2 studio to discuss the trend.
What are some of the reasons behind Millennials representing the largest share of homeowners?
•Millennials = birth years from early 1980s to early 2000s.
•Millennials are the largest generation of adults, with the oldest members beginning to reach their mid-30s and financial stability.
Although Millennials are the biggest group of homeowners, young adults still represent a smaller share of the housing market than they used to. Why is that?
•Young adults, defined as ages 18 to 35, 39.5% were homeowners in 2005 and 32.1% in 2015.
•Although they represent a little over 1/3 of the market, homeowners under the age of 35 is still lower than it was prior to the Housing Bubble and Financial Crisis.
•Lower wages, student loan debt, and tighter lending standards have made home purchases more difficult.
•Generation has also favored renting and is marrying later than previous generations.
What makes markets like St. Louis attractive?
•Prices in the Midwest and Southwest are more attractive than coastal cities.
•Most Millennial homeowners are first-time buyers, so it make sense that the homes they purchase are often cheaper than the average home price.
•In Midwest markets like St. Louis, you can get a lot more bang for your buck than on the East or West coast.
What is some advice you would give to young homebuyers?
•I tend to see Millennials buying starter homes for the wrong reasons. ◦Building home equity doesn`t always beat paying rent.
◦Housing is a place to live, not an investment
◦Buying a home for the mortgage deduction does not make sense
What is the impact of Millennial ownership on the housing market?
•New home builders are shifting their focus to starter homes.
•Housing prices for smaller homes are impacted more than larger homes