We all started 2015 with the hope that this would be the year of the millennial homebuyer. We knew that they were finally beginning to feel some financial security and with low rates and lenient loan requirements, this was the year for them to become first-time homebuyers. Plagued by low inventory, soaring home prices, and multiple offer situations (often cash offers), millennials took the back seat in our housing market and continued to rent even with rising rent costs.
In a recent report from the National Association of Realtors (NAR), they found millennials and first-time homebuyers had finally found their homeownership moxie. Even among some of the lowest millennial homeownership periods of the last several decades, first-time homebuyers are jumping into the real estate market.
In May, U.S. home sales jumped to a 5 1/2 year high with the addition of these first-time homebuyers. Most notably in the report was the increase specifically in those first-time buyers. According to the NAR, the “percent share of first-time buyers rose to 32 percent in May, up from 30 percent in April and matching the highest share since September 2012. A year ago, first-time buyers represented 27 percent of all buyers.”
First-time buyers are starting to increase for the first time in several years. This is a fantastic sign for the residential real estate market. “The return of first-time buyers in May is an encouraging sign and is the result of multiple factors, including strong job gains among young adults, less expensive mortgage insurance and lenders offering low downpayment programs,” said NAR Chief Economist Lawrence Yun. “More first-time buyers are expected to enter the market in coming months, but the overall share climbing higher will depend on how fast rates and prices rise.”
What does this mean for the Eastside?
This means that the many millennials moving to our area to take advantage of the growing technology industry are thinking about becoming homeowners. The increase in home prices may have pushed them back in the early part of the year, but this is their time to make a move.
Not a minute too soon, it seems that 2015 may in fact still belong to the millennial first-time homebuyers.