The housing market has leaped head first into recovery mode. March’s housing numbers show that the S&P Case-Shiller Index is rising more quickly on an annual basis than it has since 2006, existing-home sales have experienced 12 months of year-over-year price increases and new home sales are 29% higher than they were a year ago.
A new survey by PulteGroup shows that the housing market will continue its upward trend. The study interviewed renters between the ages of 18 and 34 (otherwise known as generation Y or millennials) and found that 65% of respondent’s intentions to buy homes had increased over the past year. 52% of millennials indicated a desire to own and build equity.
There are around 90 million millennials living in the United States, making them the largest demographic group in the county’s history – an onslaught of this group into the housing industry could create a boom larger than anything the U.S. has ever seen before.
But according to the survey most of these millennials will not be living in their new home alone. 76% of millennials will be moving in with their better half and 22% will be moving in with a relative or roommate.
The most important feature for millennials looking for a new home is the layout. 69% of respondents desired an open kitchen and family room space for entertaining purposes.
Still, things might not be as peachy as they seem says Jonathan Miller, President and CEO of Miller Samuel. “I think we’re seeing a sign of that but it’s still very early in the process,” he says. “The idea of people living with their parents because they can’t afford to go out on their own has been a problem since the credit crunch began five or six years ago.”
Miller also notes that more millennials are buying because they’re faced with record high rents. “When faced with these rents,” Miller tells The Daily Ticker, “they’re more likely to make the rent vs buy decision and some of them are ending up on the purchase side.”
According to the survey millennials are using the Internet now more than ever in their housing searches and often look at multiple websites.
Miller claims that credit needs to continue to ease in order to get more Generation Y’ers into homes. “I think credit is going to ease over the next couple of years, but it certainly isn’t at the moment,” he says.
Still, there is a silver lining. Most millennials are first time owners meaning they don’t have to grapple with selling a home or coming up from a home that’s underwater, says Miller, in that way the housing market is much more accessible to them.