The New Housing Market

2021 was a distinctive year for the housing market for many

reasons. The market expanded tremendously, with an estimated

6 million homes were sold just last year. Homebuyers entered

the market with historically low housing inventory along with a

substantial increase in house prices. Homes were selling at a rate

that has not been seen since the late 1990s and is now on track for

the highest level of home sales in 15 years. So, who is buying homes,

what is their approach to home buying, and why are they buying?

Millennials are the new homebuying generation and are

the fastest-growing portion of home buyers. From young tech

professionals to people wanting to start a family, millennials

are racing to own homes. Their generation has outnumbered

baby boomers and applied for more mortgages than any other

generation last year. They accounted for 37% of the overall U.S

housing market, with 82% of younger millennials (ages 22-30) and

48% older millennial buyers (31-40) holding the biggest share of

first-time homebuyers (NAR, 2021). In addition to buying homes,

millennials are also shaping the real estate market. They have high

standards for what they want in a home, and according to www.

squareyards.com, “developers should keep a close eye on their

preferences since they will shape the real estate market incoming

months.” The millennials have officially put down the charcuterie

boards and have stepped into the world of home-buying.

There is no argument when it comes to the statement that

millennials have a much different home buying approach than that

of the generations before them. Due to the covid pandemic, online

options for buying a home grew to be more diverse and easier to

access and navigate. From property listings being posted online, to

virtual real estate tours, the entire process is now offered through

the internet. For a majority of millennial home buyers, their first

step was to look online at properties for sale, and while others

first contacted a real estate agent, still 95% of buyers used online

tools at some point in their search process (NAR, 2021). It is even

possible to research and apply for home loans online (JBKLUTSE,

2019). The mortgage industry is becoming more modernized, and

millennials are adapting quickly.

While it has been said that millennials were late to the

home buying process due to student loans and credit card debt

(Forbes, 2019), they now have a growing desire to own homes.

Buyers who purchased a home last year, not only wished to own

a home of their own, but also wanted to move because of changes

in jobs, family situations, and the need for a smaller or larger living

area (NAR,2021). The pandemic forced households to spend more

time at home, which drew buyers into the housing market due to

the increasing demand for housing services. Lower interest rates

likely also stimulated the housing demand.

The housing market grew tremendously in 2021. Millennials

made up a majority of the market due to the urge to buy homes

because of changes in their lives, and they used online tools to

navigate the entire process. However, while starting your home

search online is convenient, the best practice is to get in touch with

a loan officer to get a pre-approval. This is a significant preparation

tool when starting your homebuying journey. A pre-approval shows

you’re a serious buyer, helps your offer stand out, and can ultimately

help speed up the transaction. Most importantly, a pre-approval

identifies how much ‘home’ you can afford. This step saves you

valuable time and allows you to target your home search to your

price level. The housing market is growing and changing each and

every day, start your pre-approval today so you can be one step

closer to the home of your dreams.