Add to the many Millennial woes: difficulty finding a home. There are a host of explanations for why young people today aren’t opting for the golden retriever and the white picket fence – student loan debt, the preference for the city over the suburbs, getting married later, stricter lending standards.
Millennial Woes in Real Estate
They say you want what you can’t have, and whether they want a home or not Millennials may not be able to find one. That’s because the inventory shortage that sent home prices through the roof in 2016 doesn’t appear to be going anywhere, according to a HousingWire article.
Three Factors Keeping Inventory Low
But “low inventory” doesn’t explain the phenomenon completely. Whereas a year ago the inventory problem was seen to be a lack of new housing starts caused by labor shortages – a vestige of the housing crisis that put many construction workers and contractors out of work – now three new factors have come into play.
Increased homeownership tenure
On average, homeowners are staying in their homes longer than before. Since the 2000s the average tenure on a home has doubled from around 4 years to nearly 8 years. That means fewer homes listed for sale.
A repercussion of the mini refinance boom of the last year is that many homeowners are ‘locked’ into mortgages with incredibly low rates, which in turn removes one of the incentives for moving.
Investors are snatching ideal first-time homebuyer homes
Many investors’ portfolios are made up of precisely the kind of homes Millennials would be interested in. By taking the ‘pick of the litter’ in many cities, these investors have reduced the pool of homes even further.
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