The FINANCIAL — Today’s first-time homebuyer is older and more likely to be single than first-time homebuyers in the 1970s and 1980s, according to a new Zillow analysisi.
Zillow’s study found that Americans are renting for an average of six years before buying their first homes. In the 1970s, they rented for an average of 2.6 years. They’re also spending a bigger chunk of their incomes to buy: In the 1970s, first-time homebuyers bought homes that cost about 1.7 times their annual income. Now they’re buying homes that cost 2.6 times their annual income.
Part of that can be attributed to the housing markets where millennials are moving: more expensive cities on the coasts, where there are growing job markets.
The average first-time homebuyer is about 33, at the front end of the millennial generation. Their median income is $54,340, which is about the same as what first-time homebuyers made in the 1970s, when adjusted for inflation.
In the late 1980s, 52 percent of first-time homebuyers were married. Today, only 40% were married.
“Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,” said Zillow Chief Economist Dr. Svenja Gudell. “We know millennials value home-ownership and want to buy. The next challenge will be figuring out how they can save for a down payment and qualify for a mortgage, especially while the rental market is so unaffordable all over the country. The last hurdle will be finding a home they like amidst very tight inventory, especially among starter homes.”