A recent nationwide survey showed that millennials are forging ahead with plans to buy homes within the next six months, despite market uncertainties and concerns about interest rates.

The details

According to recent findings from Realtor.com, the number of millennials who claim they plan to buy a home within the next year rose to 23%, up from 15% in September 2024. Only 14% of respondents as a whole indicated that they were planning to buy a home. Millennials now make up the largest portion of the home buying market, at 38%, according to the National Association of Realtors.

This age group is the one demographic that has shown growth in response to this question, as other generations are holding back. One third of those who responded to the survey say they have delayed buying a home due to high interest rates. Nationwide interest rates have been sitting at more than 6% since 2022, and 63% of respondents said they were waiting for the rates to drop below 5%.

Older generations in the Gen X or Baby Boomer demographic feel locked in by their current interest rates, and cite concerns about higher rates as reasons not to buy a new home or sell their current one.

Laurie Flood, a realtor based in Austin who serves the Central Texas area, said older buyers have been reluctant to sell in the hopes that interest rates will go down, but are gradually starting to come around to the idea of buying or selling a home.

“As it becomes clear that higher rates are here to stay, I’ve seen this hesitation gradually fade, with more clients now willing to downsize, relocate, or move closer to family,” Flood said. “Many are using the equity they’ve built in their current homes to make larger down payments, which helps offset the impact of today’s higher rates.”

The impact

According to the survey, Generation Z buyers fear they’ll never be able to afford a home, especially with the increasingly prohibitive home prices. Additionally, high economic uncertainty and fear of a possible recession have fueled anxieties among younger homeowners.

Flood said that the concern younger buyers feel is understandable, but purchasing a home sooner can still be a strong option.

“Over the past 25 years, home prices in Austin have steadily increased by about 5% per year, with no significant drops in value aside from the brief correction following the pandemic surge,” Flood said. “This long-term growth suggests that if you can afford the payments and plan to stay in the home for at least a few years, buying sooner... can be a smart financial move. “