Save money and money will save you. If you want to learn a thing or two about saving you should look at America’s largest generation. Millennials!
It appears that the generation has long struggled to gain a foothold in the housing market. But the winds of change have propelled millennials towards buying houses and rumor has it that the housing market got too hot for its own good. You read that right!
The demand for homes is far outweighed by the number of homes for sale – they’re flying off the market. And the prime market buyers are (*drum rolls*), “Millennials”!
Two simple things were all it took to be able to come out of a pandemic with enough money to buy a house. Don’t cringe! We promise you it’s going to be good.
Stay Home With Parents
Most millennials, through the pandemic, actually moved home with their parents and saved a lot more money. As crazy as that sounds, going back to living with Mom and Dad, helping Mom with dishes, laundry, and cooking—this was a smart move! Why? They saved on rent and many other monthly expenses that normally came their way. Several other benefits from the government were a bonus adding to their wealth—more like the goose that laid golden eggs for its masters.
Millennials emerged from the pandemic with extra savings. That money is now being put to use in the housing market.
Save Don’t Spend
Spending discretionary income was a big no! For obvious reasons, there was nowhere to go. All the money not spent went into their savings— what we call a “Covid piggy bank”.
It was these savings that got them to purchase homes. Over 31% of millennials were said to have credited extra savings from the pandemic, even enough to afford their down payments.
This is one of the biggest changes in generational wealth that we get to experience from the baby boomers over to their millennial children. Way to go millennials!
As the pandemic shut down most industries, there was an inventory shortage even in the housing market. The surge in home buying came amid the backdrop of low housing sales throughout the country. The pandemic caused a decline in the construction of new houses thereby restricting the supply and driving up prices. The low levels of construction and supply constraints led to high lumber costs.
On the bright side, the single-family homes market saw a massive boom over the past year and so did the prices, surging as a result of high demand. Yet the sales of new houses have continuously dropped low since the beginning of 2021. Millennials saw it coming and grabbed those houses at the best prices when it came.
Here’s a thing or two about millennials that you may not have known. They are most often pegged as being “flaky” and noncommittal due to their marriage and job-shifting choices as compared to prior generations. But when it comes to houses they look for long-term homeownership.
As the pandemic sent millennials rushing home with monetary benefits, their savings hit a jackpot, making homeownership more feasible. To a point where the existing housing inventory could run out in the next two months. The housing inventory might even stay tight in the course of the next few months. House owners are wary of listing their homes for fear of being unable to find an affordable replacement to buy. Talk about gate-crashing the housing market!