Americans are renting more than twice as long before buying their first home as they did in the 1970s, new research has found.
Aspiring home buyers are now renting for six years compared to an average of 2.6 years compared to 40 years ago, according to an analysis from real estate firm Zillow.
The analysis report also shows that first time buyers are older and less likely to be married than they were in the past and overall Americans are buying increasingly expensive first homes and spending more relative to their incomes than any time in the past 40 years.
In the 1970s, first time buyers bought homes that cost about 1.7 times their annual income. Now they’re buying homes that cost 2.6 times their annual income. The firm says that part of this can be attributed to the housing markets where people are moving which are more expensive cities on the coasts, where there are growing job markets.
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The average first time buyer is about 33 with a median income of $54,340, which is about the same as what first time buyers made in the 1970s, when adjusted for inflation.
In the late 1980s, some 52% of first time buyers were married but today that has fallen to 40% married, the research also shows.
‘Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,’ said Zillow chief economist Svenja Gudell.
‘We know millennials value home ownership and want to buy. The next challenge will be figuring out how they can save for a down payment and qualify for a mortgage, especially while the rental market is so unaffordable all over the country. The last hurdle will be finding a home they like amidst very tight inventory, especially among starter homes,’ added Gudell.
This article was republished with permission from Property Wire.