The short answer is yes. Currently Generation Y or Millennials (people ranging from birth years 1980 to 2000) are currently taking longer to dive into their first home purchase than their predecessors.
The average age for a first time home buyer now days is 33 years old, which is on the upper edge of the Generation Y population. The previous generation had an average age of 3 years younger when they first bought a home.
So why is this happening to Generation Y? Below are a few of the reasons:
- The average first time home buyer now rents for 6 years prior to buying a home, up by 2.6 years for the 1970s.
- Rents keeps raising making hard for them to save up a down payment, and get qualified for a mortgage.
- They are facing adulthood from marriage, children, to a stable career later on in their life.
- House prices and income ratio, their purchase price is now substantially more, relative to their income, than it was decades ago. First-time buyers are paying a median price of $140,238 nearly 2.6 times their income. In the early 1970s, the starter home was just 1.7 times income.
All of these reasons show why home ownership among the United States population have declined, the amount of people in the United States population that owns their own home is at a all time low in 48 years.
Generation Y (Millennials) are still very interested in buying a house, but are delaying that decision to later years on their life as they mature into adulthood. A great opportunity for them is having some of the lowest interest rates in history, so hopefully we will start seeing a raise on the amount of home ownership amount this group.