Why Are Millennials Choosing to Buy Homes?

The generation that leads all others when it comes to buying homes might not be the one you’d expect! Millennials, or those aged between 22 and 36, currently
top the list for those who are purchasing homes and using a real estate agent.

According to a study completed by the National Association of Realtors, millennials currently account for 36% of home buyers in the United States - a number that has grown by 2% since 2017.

Millennials are choosing to buy homes for reasons, largely centered around their financial and lifestyle goals. Let’s dive into some facts and figures, which might provide insight into the mindset of not only their generation, but for the many others that are buying homes in 2018.

Investing in the Future and Independence

One of the top reasons that millennials to choose to buy homes is the desire to have more control over their living space.

According to a study brought to our attention by Keeping Current Matters, 93% of millennials want the freedom to adapt their home to their individual style and living preferences, a want that’s often hard to accomplish when renting.

Whether the end goal is to complete renovations or a major remodel, or simply to own enough property to have pets or expand their families, purchasing a home instead of renting gives the homeowner freedom to do what they please with their space, without having to worry about a landlord.

Millennials also care about a sense of security when it comes to the foreseeable - or, rather, unforseeable - future. A recent survey by Fannie Mae “found that the majority of millennials said they consider owning a home more sensible than renting for both financial and lifestyle reasons.”

Owning a house creates a greater sense of stability, especially in times of unseen financial problems. Homeowners can use their monthly housing costs as a form of savings which can be borrowed against when needed.

For the past five years, real estate has ranked as the top long-term investment according to a poll by Gallup and is seen as more secure than investing in gold, stocks/mutual funds, and bonds, among others.

Historically, home ownership is also seen as a major advantage when it comes to building wealth. With home values rising in many markets across the country, owners may be able to see a high resale value when it comes time to sell - which is not something you can say when renting.

What Does This Mean In Chicago?

Though the numbers don’t lie about national home buying trends for millennials, what about the local Chicago market trends?

In 2016, “43 percent of mortgages for a home purchase in Cook County went to people under 35,” while the percentage was at 41 in the city of Chicago according to Crain’s Chicago Business. These local statistics top the national average, which suggests that 38% of purchased mortgages come from millennials.  

Financial factors often entice people to purchase a home rather than to rent. In Chicago, renting instead of buying can cost you more in the long run and is just one reason why many younger consumers are choosing the latter.

The rental market is always changing, which can mean inflated prices for renters at any point in time. A hike in a rental price can be great for the landlord, but of course leaves the tenant financially vulnerable.  

Chicago is seeing a current month-to-month rent rise of 0.3%, and while there has been an influx of rental properties in the city of Chicago so far in 2018, one-bedroom rent prices have gone up 0.7% since 2017.

It’s worthwhile to consider the long term trends for rental prices in the city. While there has actually been a slight decrease in rental prices for one-two bedroom apartments in 2018, rent steadily increased from 2012 until late 2015, and according to a study completed by Zumper in 2018, Chicago has the 15th most expensive US rental market.

Along with rising rent prices, there are other concrete benefits to buying for people of all ages. As we’ve mentioned already, owning a home is an investment - and one that is more accessible than you might think.

How Real Group RE Can Help

Whether you’re in the millennial generation or any other prospective home buyer, Real Group RE has a team of experienced brokers that are ready to assist you in your home buying journey.

If you’re still unsure of whether you’re ready to buy, sell, or rent, our team can help guide you to a decision that makes the most sense for you. Buying a home is a large investment. For many people, it’s a financial decision that can impact your entire future -  and so calling in the experts is important.

Ready to get started? Have any questions? Drop us a line whenever you need help navigating Chicago’s ever-changing real estate market!

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