For years now, home builders have focused their attention on building bigger luxury homes to fulfill the demand of homebuyers, but the tables are turning and with them a surge of starter home developments are popping up. Millennials are finally entering the home purchasing markets and as demand increases and with supply currently so low, major builders are looking to profit on this new hot market of lower price-point homes.
As buyer confidence increases across all age groups, data shows a significant shift from young people who, up until this point, were more inclined to rent, to young people now wanting to own. Of course, there are still the usual factors that have stymied the younger generation from entering homeownership (e.g. student loan debt, slow wage growth, short credit history, firm lending standards). However, as more affordable options become available and millennials continue to gain a more stable financial outlook, we are seeing the desire for homeownership more prominently than in years past. In fact, 42% of home sales this year belong to first time homebuyers; that’s up from 38% in 2015 and 31% in 2011.