Record-low mortgage rates and a drastically low housing inventory, created by societal shifts from the coronavirus pandemic, have raised the stakes on the housing market in many places. But even if competition is fierce and the process often confusing, first-time buyers seem determined to enter the market, often accelerating long-established plans for homeownership.
Millennials — generally defined as those born between 1981 and 1996 — represent the largest contingent of home buyers in the United States. This is despite the fact that millennials are also much more likely to have lost work or have entered the gig economy because of the coronavirus pandemic, factors that make it harder to qualify for a home loan.
They’re also entering one of the most competitive housing markets in decades. The median sales price of single-family homes rose more than 10 percent in 88 percent of U.S. metro areas, pushing the monthly mortgage payment for a typical single-family home up to $1,040 this month, according to the National Association of Realtors. With extra low mortgage rates — currently below 3 percent — continuing to hold, mortgage applications for both home purchases and refinancing are way up.
At the same time, the stock of active listings on the market is 40 percent lower than it was one year ago. And in September 2020, more than 22 percent of all homes in the U.S. were sold above list price; that number was 15 percent in September of both 2018 and 2019.