An NAHB Economics poll conducted during the first quarter of 2018 found that 17% of American adults plan to buy a home within the next 12 months.
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Millennials are the largest cohort of potential home buyers of any generation, and many of them are hitting their peak buying years with their pockets stuffed with cash. While millennials previously had the reputation for being urban dwellers who want to rent forever, these roughly 25– to 40-year-olds overwhelmingly want to buy homes, if they haven’t already.

U.S. Census data shows that the homeownership rate for those younger than 35 is 38.8%, and that number jumps to 62.3% for those 35 to 44 (the data includes some Gen Xers as well). The bulk of millennials are between 29 and 32, which bodes well for current housing demand. In fact, Zonda’s sixth annual millennial survey, conducted earlier this year, found that millennials have been active in the market, competing with every other generation for the limited quantity of available homes.

Millennials are scouring the market with cash in hand. Seventy percent saved money through the pandemic as expenses were reduced, social events were curtailed, and stimulus checks were issued. Perhaps most important, the student loan forbearance allowed them to pocket their payments for two years without paying any additional interest on their balances in a program that has been extended through August. Zonda calculates that a dual-income household where both individuals had the average student loan amount and both stayed employed during the pandemic could have saved enough money to make a dent in the down payment on a home.

They haven’t hesitated to use that money to get in on the housing market, either. Slightly more than 70% of those who bought reached into their cash savings to make their down payment, according to our survey. They also leaned toward more traditional methods of first-time funding—25% of buyers used portions of the sale of another property to pull together the cash needed for a down payment, capturing the prevalence of move-up buyers among the millennial cohort. Additionally, roughly the same amount needed to rely on relatives for help, while just under 20% also sold stocks to fund their homeownership dreams.

Fear of missing out is a big driver in today’s housing market. As prices rose throughout the pandemic, so, too, did the desire to get into the market. Almost 45% of millennials stated this price appreciation as one of their motivations to buy a home, making it the survey’s most cited reason for buying.

They were also largely motivated by the same lifestyle factors as previous generations, such as settling down, nesting, and having a family. And like many buyers who had looked to make a move over the past two years, pandemic-induced lifestyle changes had roughly 35% of respondents wanting more space. Other reasons to buy included a lower monthly mortgage than rent payments, a frustration at a lifetime of renting, a desire to call something their own, and the perceived tax benefits of homeownership.

Of those millennials looking to buy, 43% said they were wanting to buy soon, with 14% of these respondents saying they were looking to buy as soon as possible but limited inventory was holding them back.

Millennial respondents said a top priority when house hunting is to live near stuff to do. They are weighing commute distances in their home buying decision-making as well, even as more hybrid work options exist. And no surprise here: Those with children or planning to have children place school quality near the top of their priority lists.

Even with cash on hand, things have recently become more complicated for millennial first-time buyers. They are the most vulnerable to affordability challenges, and the monthly mortgage payment has increased nearly 30% since the start of the year due to rapidly rising interest rates. Knowing what millennials want and what they can afford to pay is more important now than ever.