Millennials in South Florida are buying more expensive homes than other homebuying groups, as inflation and rising home prices influence the market, new data shows.
The median home purchased by a millennial in the tricounty area is about 2.4% higher than the median home that is purchased by all homebuyers in the area, according to Construction Coverage, an online company for construction and housing needs.
The difference in purchase price among millennials and other generations in South Florida represents the 14th largest gap in the United States among the most populated metropolitan areas. Other metropolitan areas such as Chicago had a gap of 3.1% between millennial purchases and other generations, while the Hartford area had a gap of 3.4%.
On average, in South Florida, a millennial homebuyer is buying a home with a median home value of $425,000, compared to other homebuyers who are purchasing homes with a value of $415,000.
“Many millennials are reaching the age where they are getting ready to settle down, form households, and have children — all of which require more space, and for many, buying property,” said Michael Stromberg, chief technology officer at Construction Coverage.
There’s a few reasons why millennials are purchasing more expensive homes in South Florida, local real estate agents noted.
Some millennials have access to different revenue streams, such as Bitcoin or social media marketing, that allow them to have more income to put toward a home, said Mike Figueiras of The Keyes Company.
“That’s what we are experiencing when it comes to proof of incomes from that age group,” Figueiras said. “These streams give them more and easier money than those over 55 who just aren’t doing that.”
And for older millennials looking to purchase, many have equity from a previous sale that they are able to use to put toward a house.
“They might be expanding and they can afford more house,” said Patty Da Silva, broker with Green Realty Properties in Cooper City. “They usually have less debt and they have become more financially stable. They are in a place in their life where they want what they want and they can afford to buy it.”
And in other regards, it can come down to necessity. Research shows that millennials are buying homes that have a higher price-to-income ratio than other generations.
“Rental homes are so expensive that it makes more sense for millennials to buy a home and build equity as opposed to paying the same monthly payment for a rental that’s paying someone else’s mortgage,” said Brian Pearl with the Pearl Antonacci Group in Boca Raton.
To calculate the gap in homebuying purchases, Construction Coverage used data from the Federal Financial Institutions Examination Council’s 2021 Home Mortgage Disclosure Act, and compared the median price for the typical residential home with an originated mortgage for millennials and all homebuyers.
