Millennials follow a pattern that’s all their own.
Many prefer to live in downtown urban areas paying rent, that they know is way too high, rather than buy a home. So what does that mean when they do decide to buy?
For starters, they aren’t concerned about interest rates going up, according to a report from Trulia.
In fact, Millennials are less concerned about buying a home before interest rates increase, and more concerned that they won’t be able to find a home they want, according to the report.
The Fed will soon decide whether or not to raise rates, and whereas there is much debate about whether or not the Fed will raise rates due to the recent jobs report, it seems many are more concerned with rising home prices than anything else.
About 30% of Americans said they were worried they wouldn’t be able to find a home for sale that they like if they were to buy a home this year, as opposed to 20% who said they were worried about mortgage rates rising before they bought a home.
For Millennials, however, about 37% said they were more worried they would not be able to find a home they liked. This is up from 30% in September 2015.
And it’s no wonder. Housing inventory continues to be low, and predictions show it could even get worse as Baby Boomers begin to look to pay less on their mortgage.
“Consumers are increasingly worried about tight inventory when finding a home, and rightly so,” Trulia Chief Economist Ralph McLaughlin said. “Low inventory has been, and will continue to be, a strong headwind for house hunters, and impacts their ability to buy a home much more than increases in mortgage rates.”
During the last four years, starter homes on the market dropped 43.6%, and the number of trade-up homes dropped by 41%, according to Trulia’s last quarterly inventory report.
“Homebuyers should be more worried about finding a home than interest rates,” McLaughlin said. “In most markets, mortgage rates rates would have to be between 7% to 10% for financial advantages of homeownership to fall away.”
