Millennials Want to Buy Homes Soon, but NJ Supply ‘Constrained’
They've been scared off by stagnant wages and a lackluster housing market, but a good share of potential first-time homebuyers seem ready to take that plunge in the near future.
In the First-Time Home Buyer Pulse from TD Bank, which polled more than 1,000 Americans looking to purchase a home in the next five years, 67 percent of millennial respondents said they think that purchase will be made in two years or less.
Patrick O'Keefe, director of economic research at CohnReznick in Roseland, said the TD Bank findings echo other reports that also show increased interest from millennials in homeownership, and that's encouraging.
"They had been, as a cohort, reluctant to look at homeownership as an option," O'Keefe said. "As they've gained maturity, they're reconsidering their housing options."
Millennials have been somewhat pigeonholed as a generation interested more in renting than buying, enjoying a city life that offers both work and play within walking distance. But as the years go by, individuals become couples, and those couples become families, and those families need a place to grow.
"Homeownership is a crucial part of economic growth, and we need more buyers these days, and millennials are where they'll come from," O'Keefe said.
However, just because millennials are wanted and more are aspiring toward homeownership, making that purchase isn't so simple these days. O'Keefe said the market today is "not as accommodating as it was" for previous generations.
The process is weighted heavily by stringent borrowing guidelines, and one blemish on someone's credit rating could serve as a red flag. On top of that, many millennials have outstanding student debts, which can inhibit the amount they're allowed to borrow.
New Jersey buyers are also faced with a "constrained" supply of for-sale homes, according to O'Keefe.
In the TD Bank survey, when asked what is preventing them from purchasing their first home, most respondents cited the need to save money for a down payment. More than 20 percent of consumers said they can't find a home in their price range.