Home prices in many places have been steadily rising, buoyed by a growing economy, low interest rates and a chronic lack of inventory in some markets.
While that spells good news for homeowners – and home sellers – it is creating worry for many first-time buyers who are watching prices steadily get out of reach. That is particularly true for millennials, a sector critical to the future of the housing market.
A study out this week from national realtor Redfin shows worry about affordability is growing more predominant among home buyers, but the fear is more acute among young people.
Just over 28% of buyers said they were most worried that “prices are rising or are too high,” the largest percentage to cite this concern in more than a year, according to the Redfin survey, which was conducted in August and includes more than 1,800 home buyers. Among millennials — buyers 35 and younger — 32.5% said affordability is a big concern.
The gap between affordability and other concerns is also widening, the study finds. The second-most cited top concern was “too much competition from other buyers,” at only 13%. In previous surveys, the second- and third-most cited concerns made up a far higher percentage of total responses. Last year it was 31.4 percent, while in May it was 33.5 percent.
Despite lower mortgage rates and increased employment, millennials aren’t touring open houses or scouring online listings in search of their new homes, research suggests. Their tendency to live at home with parents and delay getting married has raised concerns about long-term homeownership trends.
Millennials who end up living with their parents has been on the rise steadily since the Great Recession, peaking at about 36%, according to the Pew Research Center.
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