While the DC area continues to transition to a new pandemic-era status quo, the time has come once again for UrbanTurf to reflect on the state of real estate over the past year.
This week, we refresh our collective memory with a 2021 Year-in-Review series.
Although the past two years have been a dumpster fire, the pandemic created an opportunity for a few. Those few are the younger generations who were able to foray, en masse, into the housing market.
A Zillow survey conducted this year found that 83% of young adults saved money this year, and of that group, 60% planned to use that money toward a down payment on a new home. Those savings were made possible by federal Covid relief payments, deferred student loans (long cited as an obstacle to homeownership for these generations), and for nearly 3 million people, moving back in with their parents.
Millennials are expected to contribute to an increase of 6.4 million households by 2025, and interest rates remaining near record lows have made homeownership more affordable than it was for previous generations, mitigating rising home prices. These dynamics were on full display this year.
During the first eight months of 2021, millennials accounted for 67% of first-time mortgage applications and 37% of repeat mortgage applications. Some are also predicting that the increasing wave of millennial homeownership will also help shift homeowner demographics overall: as 45% of millennials are nonwhite, it is expected that the net increase in homeowners will be predominately among nonwhite households.
Now, all these young homebuyers will have to contend with is an extremely competitive and supply-constrained market.
This article originally published at http://dc.urbanturf.com/articles/blog/why-2021-was-the-year-of-the-down-payment/19062
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