Think the real estate market is not for millennials? Think again. Here are three important tips millennials need to know about the 2020 housing market in Minnesota.
1. Despite what you’ve heard, millennials are buying homes. Lots of them.
According to realtor.com’s 2020 forecast, 50% of all home purchase mortgages will be for millennial home buyers. City Pages reported that on a list of the 50 largest United States metro areas, Minneapolis came out on top as the most popular with 23- to 38-year-olds, who made up over 56% of the city’s home-buying requests in 2019. Not to mention, rents are sky high in Minneapolis, with the average rent for an apartment in Minneapolis $1,594, a 3% increase compared to the previous year.
2. Supply is still a problem.
Waiting for your lease to run out before looking for a home might not be a good idea. As housing supply continues to be tight in Minnesota real estate in 2020, waiting until your rental lease is up may mean losing out on a home in your desired location. Gen X’ers and Boomers are hanging on to their homes longer, and overall there is less supply in the most sought after areas. Affordable homes in the first ring suburbs are the most desired and quickest to go. Don’t let this scare you! If you are looking for a home, consider creative ways to make up for lost income of a month or so of rent. Can you enlist friends to help you move as opposed to hiring movers? Could you break early and move in with friends or family for a few months while you house hunt? And most importantly, partner with realtors that understand speed and attention to detail can mean all the difference in winning a bidding war.
3. The election could influence the housing market
Political instability can cause consumer worry, and where there is worry there is less decision making to buy, sell, move and build. Some experts say that in the months of August and September leading up to the election, sales were more than 12 percent weaker compared to non-election years. The good news is this is usually followed by a rise in November and December. Consider this when you make your decision to house hunt this spring and summer.
In summary, buying your first home as a millennial is a great move in Minnesota while rents are high and mortgage rates are low. Be armed with information and expert advice as you start your search in 2020!