For many real estate agents, millennials are quickly becoming the largest demographic among clients as they are taking out the greatest share of all new mortgages and buying up the most homes in the lower price tiers.

Working with a growing base of millennial clients means knowing the trends that impact this demographic in today’s real estate market.

According to data from®, they are taking on way more debt to do it.
The data included more than 3.2 million mortgages originated from January 2013 to October 2017, and sliced the data by age group to® Chief Economist Danielle Hale said it offers a sense of how the buying habits of millennials and other generations are changing.

“It’s a mixed bag for millennials,” she said, adding that the generation born between 1982 and 2000 continues to face challenges.

Moreover, while home prices have increased, so have median purchase prices. pointed out that millennials were getting mortgages on homes with a median purchase price of $237,000 in September 2017, while Generation Xers (born between 1965 and 1981) were buying homes with mortgages on a median price of $280,000. Baby boomers (born between 1946 and 1964) fell between them, at $258,000.

However, millennials are narrowing the gap in purchase price with other age groups.
Although millennials remain far behind Generation X in purchases of high-end homes, priced at $700,000 and up, they just overtook baby boomers in that price category in the summer of 2017.

Despite millennials taking on a greater amount of debt as they reach for those more expensive houses, their debt-to-income ratios haven’t gone up much—a sign that their incomes are improving as well. Hale noted that in October 2015, the average debt-to-income ratio of a millennial mortgage applicant was 37 percent. In October of this year, it was 38 percent.

“The important metric is looking at down payment percentages and debt-to-income ratios, and the fact that those have been pretty consistent for millennials is a positive sign.”

Millennials are putting down almost as much, percentagewise, as members of Generation X—and have been for some time. The average down payment for mortgages originated by millennials is 9.1 percent, just slightly lower than the four-year high of 9.4 percent in October 2014. Gen X buyers have been putting down an average 11 percent on their mortgages since early 2013. This is good news, according to Hale.

“When you consider where [millennials] are in the homeownership cycle, it’s reassuring that their down payments have been constant.”

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