It turns out millennials aren’t the renter generation after all. The 2022 Consumer Insights Report from Mynd says a portion of millennial and Gen Z buyers are pursuing homeownership as a way to build their wealth. Still, it may not be exactly how previous generations have done it. The study explains how they’re breaking into the market:
“. . . younger generations of Americans are not buying into that dream in the same way that older generations have. A growing number of Americans are choosing to make their first real estate purchase as an investment property.”
Instead of buying a home and moving into it themselves, some young buyers are purchasing a home to use it as a rental. This tactic may be gaining popularity, at least partly because of the affordability challenges brought about by today’s higher mortgage rates. The report above mentions how many people in this group are considering this approach. It says:
“Almost half of Millennials and Gen Z (43%) are considering buying an investment property compared to only 9% of Baby Boomers and 27% of Gen X.”
Why Younger Buyers Are Buying a Home To Use as a Rental
This strategy allows buyers to continue living in their current location, like the bustle of a city apartment or a neighborhood they know and love, where they couldn’t afford to buy. But instead of giving up on the idea of owning a home, they buy a home in a more affordable area, intending to rent it out.
In a way, they’re getting the best of both worlds. They live where they want and still own a home where they can afford it.
Their goal is to generate passive income and diversify their assets. It works like this: in addition to having a rental income stream, the equity they build in their house will also help grow their net worth over time.
Key Takeaway
If you’re considering buying a home as an investment strategy to build your wealth, let’s connect to explore your options and nearby areas that may have homes that fit your needs.
Other educational articles about the market and your home search are under Karen’s Blog.
