A Picture of the New First-Time Homebuyer
Ellie Mae data indicates that rising rates, higher prices, and lack of inventory didn’t scare away millennials in October. At first glance, they appear to be a brave bunch. But more likely than not it might be fear of higher prices and higher rates driving those that can still afford to buy into the market. That is not necessarily a bad thing — enough buyers for the number of homes on the market seems just right. But there are many more millennials who would like to someday be homeowners but can’t afford to make the leap.
That might seem OK. But if you think about it, some millennials could be grandparents. They are not necessarily recent college grads. Pew Research has the first millennials born in 1981. That makes the oldest millennials about to turn 38 years old. When the first millennials were born, Ronald Reagan was waiting to be sworn in, the Cold War was still being waged, and we were 16.5 years from the introduction of the first iPhone. No, millennials are not likely to be grandparents. It is a peculiar way to look at them, but it puts their age group into perspective.
It’s just as odd to keep thinking about them as kids out of college waiting to enter the home buying market. Some millennials are turning the corner toward middle age. Gen Z, the generation that follows millennials, started to graduate from college last year. How many of their parents and grandparents were looking to buy homes in their early 20s?
As we look to 2019, we need to consider the fact that we might be a generation behind when it comes to homeownership. At least in the way we used to think. Maybe it’s time to accept that “30-somethings” — whether they be millennials or not — are the “new” first-time homebuyer.