Employment Centers Are Gaining In Popularity
Younger adults are finding themselves moving to higher-priced to be closer to more employment options.
The housing market has historically seen younger adults rent and wait to buy a house later in life.
One of the biggest reasons they were waiting was that they found job security an integral part of their decision. This “job-centric” approach to home buying demonstrates this group’s affinity for foresight and planning.
Many recent graduates have high student loan payments and want to ensure stable and long-term employment is within reach.
coupled with financing options like stable, low-downpayment 30-year fixed rate mortgages are making home buying affordable, even in many employment-rich areas.
The Decision To Buy Is Getting Easier
The purchase of a house can come with a large price tag. This is especially true for recent graduates with student debt and entry-level employment.
Plus, finding a home they want to live in for years to come is one of the biggest decisions they’ve ever made.
However, rental rates continue to rise.
The real estate website Trulia released an October 2015 study showing that the monthly mortgage payment for adults ages 25-34 was twenty-three cheaper than what they would pay in rent.
As rental rates keep growing, so does the housing market; nearly 6 million homes are estimated to be sold this year.
For younger adults making the decision to rent or buy a home, owning is becoming the less expensive option. And they are starting to look at the perfect time; rates are low and homes are still affordable.
Younger Adults Looking For Stable, High Incomes
According to the U.S. Census Bureau, younger adults have the highest migration rates among all other adult generations. Those between ages 20-34 tend to be the most transient group in the country.
However, a subgroup of this set, those between 30-34, move around the least.
People move for a variety of reasons like a job change, more affordable housing, or family related reasons, according to the bureau.
But younger adults are not moving as much as they used to. According to the U.S. Census Bureau’s American Community Survey, younger adults moved less in 2012 than they did in 2009.
When they do move, it seems to be for the purpose of better employment opportunities. Between 2007 and 2013, Arlington County, Virginia, and Alexandria City, Virginia both saw more than an 80% increase in Millennials, according to RealtyTrac.
Both areas are located near Washington D.C. and both had unemployment rates below 3.7 percent, well below the national average.
These two areas are followed by New Orleans, San Francisco, and Denver as the top places with Millennial population growth in 2013.
Median home prices in two of these areas skew much higher than the national average.
As of April 2014, Arlington County had a median home price of $505,000 while San Francisco was nearly double that, at $950,000.
Young buyers do not seem to be phased by higher home costs. They appear to be looking past that in favor of better job prospects.
Homeowners Under 35 Plan To Keep Homes Longer
Younger adults are waiting to purchase a home where they can stay for years into the future. As such, older Millennials ages 30-34 were reported to be the least likely among other younger adults to move.
Bank of America’s 2016 Homebuyer Insights Report found that 75% of first-time home buyers bought homes that they plan to keep well into their future; nearly half of them want to retire there.
Today’s younger buyers are showing a strong interest in setting down roots in a preferred location. The primary way they are doing this is by owning a home.
What Are Today’s Rates?
Low mortgage rates coupled with housing options like fixed rates and low downpayments are making home buying an easier choice to make. Home payments are affordable and mortgage rates are low.
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