Despite market fears, millennials are buying into home buying

First-timers accounted for 33% of all home purchases in May: NAR
July 14, 2017 04:30PM

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Despite stalled wage growth and fears about the housing market, millennials nationwide are becoming more interested in buying real estate.

The number of Google searches about buying a first home increased by 11 percentage points to hit 44 percent of all home buying-related searches in 2017, compared with a year earlier, the Wall Street Journal reported, citing Chase Home Lending data. Housing affordability searches jumped 34 percent last year, compared to the year before.

The most popular mortgage-related questions were variations on “How much mortgage can I afford?”

First-time home buyers made up 33 percent of all home transactions in May, a year-over-year increase of 3 percent, data from the National Association of Realtors show.

First-home buyers play an important role because they bring in fresh demand, and allow homeowners to buy more expensive real estate, and stimulate demand for new construction. Data from mortgage giant Fannie Mae found, so far this year, new purchases accounted for 42 percent of all transactions from January through April, an increase from 40 percent in 2016. Fannie Mae defines first-time buyers as people who have not owned a home in the past three years.

“I had assumed that we would start to see millennials come in in force in the next two years. They’re already here and buying today,” Amy Bonitatibus, chief marketing officer at Chase Home Lending, told the newspaper.

Interest rates have spiked this year, which is said to be forcing millennials further out of the housing market. [WSJ]Miriam Hall