Nearly 75% of millennials make sacrifices to afford housing
Despite slowing home price growth, 74% of millennials make financial concessions to afford housing compared to 40% of older generations, according to CoreLogic.
Overvalue in some of the biggest housing markets cause swaths of millennials to make cuts in their personal lives, work a second job, or bring in roommates and renters.
"About 40% of the top 50 largest metropolitan areas in the country are now categorized as overvalued and we expect that percentage to grow over the remainder of 2019," Frank Martell, president and CEO of CoreLogic, said in a press release.
"The cost of either buying or renting in expensive markets puts a significant strain on most consumers. Our research tells us that about 74% of millennials, the single largest cohort of homebuyers, now report having to cut back on other categories of spending to afford their housing costs," Martell continued.
Housing price appreciation increased 4% year-over-year in February after rising 4.4% annually in January. The pace of growth has slowed, siphoning since hitting 6.6% back in April 2018. Annual prices project to grow 4.7% by February 2020 while falling 0.5% monthly, according to CoreLogic's home price index.
The price deceleration should bring a healthy spring for home purchases.
"This is the opposite of what we saw the last two years when price growth accelerated early," said Frank Nothaft, chief economist for CoreLogic. "With the Federal Reserve's announcement to keep short-term interest rates where they are for the rest of the year, we expect mortgage rates to remain low and be a boost for the spring buying season. A strong buying season could lead to a pickup in home-price growth later this year."