Who Wants to Buy a House? Millennials Do Too.

If you watched 60 Minutes on March 20th, you probably saw the segment with Lesley Stahl about the rental market, specifically the corporate rental market.  While Gary Berman of Tricon, whom she interviewed, stated that the corporate landlord represented only about 2% of the total national rental market, it is a powerful segment.  Because their homes are turnkey in a rising market, their rents may be up 30% or more compared to a previous year: examples were 35% higher rents in New York, 39% higher in Portland, 10% higher in Los Angeles, but surprisingly down in Kansas City.  There has always been part of the population which by choice prefers to rent--such renters actively do not want the responsibility of maintaining property.  And then there is the segment of the population which may have good income, but is cash poor, or has credit ratings below the mortgage approval guidelines.  But increasingly are those young renters who would like to buy their first home, have excellent qualifications to get a mortgage but may not have enough cash to compete in over-list-price multiple bid offers or enough to obtain a 20% down loan, perhaps 5% down is the best they can do.  

 View from porch of home

But one thing that I don't believe is true are the younger buyers--typically in the under-40 millennial age group--who have been characterized in multiple media sources in the last few years as being uninterested in owning a home.  This was made clear by the young couple spotlighted in the 60 Minutes show, who directly contradicted the statement made by Mr. Berman that millennials "don't desire to own a home" because their main emphasis is living in a turnkey space and thus fit the profile of "You can rent the American dream" as opposed to owning it, which young couple made it clear they wanted to be able to buy a home, but competing in the current buyer/seller market was extremely tough for them.

In my experience, adults of all ages would prefer to live in a turnkey home, not just younger adults: and if not turnkey then a home purchase that presents a clean, relatively updated condition.   The view that younger adults don't care about owning a home is a misrepresentation that can ultimately deny them the opportunity to own, thereby gaining housing and community equity.

The current trend in asking buyers to remove standard contract contingencies can be a direct pathway to housing disaster for  a number of reasons--yet this is what many younger (and older) adults encounter in the home offer process, and is indeed discouraging, and just influences their continuing status of being a renter when they would like to be an owner.  The upward price climb is staying in motion, but other things do not have to, and should not.  Sellers should be advised of the risks involved.

See the 60 Minutes video .  

Julia Huntsman, REALTOR, Broker | www.juliahuntsman.com | 562-896-2609 | California Lic. #01188996