If you think Millennials aren’t having a major impact on today’s real estate market, think again. As a strong pent-up demand of young and first-time home buyers slowly but surely starts to enter home ownership, inventory—especially in Nashville—continues to dwindle more and more with each passing day.
But even with more Millennials finally making that long-awaited transition from renting to owning, many are still opting to rent rather than buy, but not for some of the reasons you might assume. In recent months, there’s been lots of dialogue relating to hefty student loans negatively affecting the housing market, as potential first-time home buyers might find it difficult to manage the financial obligations of purchasing and owning a home while also balancing a significant amount of student loan debt.
But according to some statistics, the chances of a married couple with no student loan debt owning a home is right around 69.8%, while the chances of that same couple owning a home with around $30,000 in student loans is right around 67.7%—a difference that’s minimal at best.
So if student loans aren’t quite as much of a factor in Millennials forgoing home ownership, what is keeping younger home buyers from entering the marketplace?
Answer: high rents.
In markets all across the country, rentals have exploded over the past 12 to 18 months, and here in Nashville, downtown apartments have had some of the highest occupancy rates since 2007. As a result, rent prices continue to climb, ultimately making it harder for those living in a Nashville apartment to save for a down payment.
Furthermore, Nashville’s limited inventory—for just about anything and everything on the market—is also driving home prices up, additionally making it tough for Millennials and other first-time buyers out there just waiting to finally make a move.
If you are able to buy right now however and have just been waiting for the right time, that time is definitely now. With current mortgage rates staying put for the time being, those who want to take advantage of historically low rates better act fast before we inevitably see a jump, most likely sooner rather than later.