Millennials on the Move

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By Howard Schneider

Young adults are important prospects for community bankers. Millennials are greater in number than their baby boomer parents. Additionally, they’re reaching the age when Americans typically borrow in order to make large purchases.

Millennials haven’t seemed to be in a rush to buy homes, however. Some still live with their parents as they pay off student loans and try to land a job with stable long-term prospects—or so recent conventional wisdom has gone.

Yet recent new evidence shows that younger people are beginning to play a major role in housing purchases. Millennials now make up almost one-third of all home buyers, reports the National Association of Realtors. However, 65 percent of Americans struggling to gain home financing are under age 45, according to realtor.com. And two-thirds of that young cohort are making their first home purchases, NAR reports, and getting a loan is a big concern.

More than half of all first-time buyers say they need to improve their credit score and boost their savings. Yet these prospective homeowners are persistent; many will spend more than a year finding the right house and lender.

Contrary to some media reports, recent surveys show that homeownership is as important for millennials as it is for their elders, NAR says. Some younger people and families have been slightly behind that traditional Harry and Harriet homeownership dream because of the recession, but even the number of those young people has been exaggerated as well, the association says.

And another dynamic of first-time home buying remains alive and well—that of parents helping out with down payments—if for no other reason than to get the kids out of their basement.

—Howard Schneider

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