Curve

Millennials outrank Boomers on recent mortgages

Aly J. Yale
The Mortgage Reports contributor

Millennials take the crown

The days of Millennials sitting on the homebuying sidelines have now come to an end. According to new data, the generation is now taking out the largest dollar share of new mortgages in the nation.

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Bye bye, Boomers

According to a new analysis from Realtor.com, Millennials now account for the largest share of new mortgages by dollar volume — outranking both Generation Xers and Baby Boomers. They now make up 42 percent of all mortgage dollars originated in the U.S.

The generation already claimed the largest share of mortgage loans numerically, taking out almost half of all new home loans in December. Generation Xers accounted for 36 percent, while Boomers accounted for 17 percent.

Javier Vivas, Realtor.com’s director of economic research, said it’s all about the place Millennials are at in life.

“Millennials are getting older, with better jobs and deeper pockets, allowing them to expand their collective purchase power, and hence, their footprint in the market,” Vivas said.

For Millennials, homeownership is more important than kids, marriage

Getting ahead

Millennials are also taking on larger mortgages, making lower down payments and buying lower-priced homes than generations that came before them.

According to the data, the median-priced home for a Millennial buyer is $238,000. Median prices for Baby Boomers and Gen Xers sit at $264,000 and $289,000, respectively.

When it comes to down payment, they’re only putting down an average of 8.8 percent — significantly less than the 17.7 percent of Boomers and 11.9 percent of Gen X. That might be due to a lack of savings. According to a recent survey from Freedom Financial Network, 38 percent of Americans have less than $1,000 in their checking and savings accounts.

Millennials are onto something: Creative ways to save for a down payment

Bucking trends

Despite what many have assumed, Millennial buyers aren’t flocking to urban centers. According to Realtor.com data, they’re increasingly heading toward more affordable markets — particularly those in the Midwest.

The top markets for Millennial mortgage originations are currently Buffalo, New York; Pittsburgh; Milwaukee; Cincinnati; Columbus, Ohio; St. Louis; Boston; Indianapolis; Cleveland; and Baltimore.

“The stereotype that Millennials primarily choose to buy homes and live in large metro areas isn’t the reality,” Vivas said. “Results show Millennials’ expansion is more heavily conditioned by affordability than in prior years, so their eyes are set on less traditional secondary markets where homes and jobs are now available and plentiful.”

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Verify your new rate (May 23rd, 2019)