Millennials are now the biggest generation and the biggest mortgagees
Children now outnumber parents, and this is having an impact on the residential housing market in America.
Millennials, those born between 1981 and 1996, now number 72.26 million in the US population, according to a new report from Statista; while the baby boomers, born between 1946 and 1964, rose to 70.68 million.
This makes Millennials the tallest of our generations, and with ages ranging from 25 to 40, they are also in their early years of buying a home.
CoreLogic, a leading provider of real estate data and analytics, says its data shows generational dominance: Millennials so far accounted for 51% of mortgage applications in 2021, up 5 percentage points from compared to 2019 and continuing a streak that began in 2016 when this cohort became the leader of this revealing metric.
Generation X – people born between 1965 and 1980 – are second this year with just under 30%, and their share has been steadily declining since 2015, when they accounted for almost 40% of new mortgage applications. and millennials only 35%.
Of course, where this purchase takes place is at the center of a CoreLogic study whose findings can guide real estate investors to the best opportunities to buy a flip or a rental, at least in terms of research. willing buyers and tenants.
Silicon Valley has the most millennial activity despite its high prices
CoreLogic data shows that millennials particularly dominate some high-cost, high-tech markets and other regions that offer both employment opportunities and affordability.
So far this year, Silicon Valley is leading this metric, with millennials accounting for 64% of home loan applications in San Jose, California. Seattle, Pittsburgh and Austin, Texas followed at 61%, followed by Boston and San Francisco at 60% each. The top 10 is completed by Salt Lake City, Milwaukee, Minneapolis and Buffalo, New York.
Over the past two years, tech-intensive San Jose, San Francisco, and Seattle have grown their millennial mortgage market share faster than other cities. Meanwhile, more affordable areas, such as Pittsburgh, Salt Lake City, Milwaukee, and Buffalo, have seen only a small increase in the share of millennial homebuyers during this time.
And the lowest percentage of millennial mortgage applications among major cities was 43% in Miami and Las Vegas; followed by Tampa and Orlando, Florida, at 44% each; and Jacksonville, Florida, and Phoenix at 45% each.
Next step: Gen Z will be the largest cohort yet, and they will mature soon
Deciding where and when to buy a home is more important than age, with each individual and family making their own decisions about things like career advancement or working remotely. But such macro views of the residential housing market can provide high-level insight into real estate investors given the major trends in the markets they have targeted.
And that said, don’t fall asleep on Gen Z. People of this generation, those born after 1997, are by some estimates already the greatest generation or soon will be. CoreLogic data shows Gen Z accounts for less than 5% of mortgage applications so far.
But give them time. Their first few years of home buying await them, as do the residential investment opportunities they may present and the trends they will set.