Young buyers are flooding the housing market as they come of age to make their first purchase, but many are also turning to relatives and friends for help with their financial needs.
Millennials are responsible for the dominant share of real estate transactions -- a trend that is expected to continue in 2021 and beyond, according to a report from Realtor.com.
The largest share of people who purchased their first homes last year told Realtor.com that it took them between one and three years to save for their down payments.
More than half of first-time buyers received help with their down payments from family and friends, Realtor.com researchers found. About 20% received a loan from their parents and 12% borrowed from siblings.
A majority of homebuyers said they were able to find a home with all of their desired characteristics that also fit within their budget.
The data was first reported by USA Today on Wednesday.
Despite a recent surge in housing prices, Federal Reserve Chair Jerome Powell downplayed concerns about a potential bubble in the market, chalking tightness that has caused price increases up to a transient phase triggered by the pandemic.
“So there’s a one-time shift in demand that we think will get satisfied – also that will call forth supply and we think those price increases are unlikely to be sustained,” Powell explained during a press conference following the FOMC’s two-day policy meeting late last month.
The latest reading from the S&P CoreLogic Case-Shiller Home Price Indices showed that home prices nationwide rose 9.5% in November compared with the same period last year – and were up 8.4% month over month. In some major metropolitan areas, like San Diego and Seattle, price increases exceeded 12%.
“The National Composite last matched this month's 9.5% growth rate in February 2014, more than six and a half years ago,” Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, said in a statement. “From the perspective of more than 30 years of S&P CoreLogic Case-Shiller data, November's 9.5% year-over-year change ranks near the top decile of all monthly reports.”