Despite recent stock market volatility, new data from Redfin suggests that less than 50% of older Millennials and young Gen-Xers believe investing in real estate is a good idea.
According to the company, 48% of homebuyers and sellers between the ages of 35 and 44 believe that real estate is a better long-term investment than the stock market.
The image below highlights the investment preferences of Americans based on age:
(Click to enlarge)
This data was gathered from a survey Redfin commissioned back in December, consisting of more than 2,600 homebuyers across the country, who had purchased or sold a home within the last year, attempted to do so, or had plans to buy or sell in the future.
Redfin notes that in every other age group, buyers and sellers who believe that real estate is a better long-term investment outnumbered the respondents who believed the stock market was a better option.
This statistical outlier could possibly be attributed to skepticism older Millennials and young Gen-Xers feel towards the housing market, as they were the median first-time homebuying age during the Great Recession.
“The oldest Millennials and youngest Gen-Xers entered their late twenties or early thirties during the housing crash, which explains why they are more skeptical about investing in real estate,” Redfin Chief Economist Daryl Fairweather said. “This generation experienced a major setback during the housing bust, which hit just as they were most likely to be getting married, starting a family, and becoming a first-time homeowner.”
“Looking into the future, we expect to see homeownership increase as Millennials enter prime home-buying age,” Fairweather said. “This is because Millennials have a more favorable opinion of real estate as an investment than Gen-Xers, and Millennials are a larger group than Gen-Xers.”
According to data from the U.S. Census Bureau and First American, over the next 10 years, Millennials are expected to purchase at least 10 million new homes. In fact, by 2060, it is estimated that the generation will have produced more than 20 million first-time homebuyers.
You can read more about First American's report here.
NOTE: This survey was conducted between November 2 and December 10, 2018, utilizing Qualtrics. Redfin surveyed 2,647 people who indicated they had bought or sold a home in the past year, tried to buy or sell a home in the past year, or plan to do so in 2019.
Published at Mon, 07 Jan 2019 19:59:00 +0000