Millennials Show Increased Interest in Buying
A new survey showed Gen Z appears to be the most cautious and wary of high mortgage rates with an increased inclination towards signing a lease.
AUSTIN, Texas — Millennials are the only generation with a greater interest in buying a home in the next six months compared to September 2024, according to a new survey from Realtor.com®. Millennials' buying intention grew to 23% this year compared to last September (15%), although most Americans (69%) are not planning to engage in a real estate transaction in the next six months.
"Despite current market challenges and persistently high mortgage rates, Millennials are showing a notable increase in home buying interest this spring compared to last fall," said Laura Eddy, vice president of research and insights at Realtor.com. "Even though we found a change in Millennial homebuying intent, the influence of mortgage rates cannot be overstated, with the vast majority of Americans, including Millennials, prioritizing lower rates before committing to a purchase. The lock-in effect is still very much in effect "
High mortgage rates continue to impact the market, with one-third of respondents reporting they have delayed purchasing a home due to these rates, a figure consistent with September 2024 findings. Younger generations are particularly affected, with over half of Millennials and Gen Z stating they've postponed their purchase. Gen Z appears to be the most cautious and wary of high mortgage rates, showing an increased inclination towards signing a lease and a growing number delaying home purchases due to mortgage rates compared to September.
Overall, over two-thirds of respondents acknowledge that mortgage rates influence their decision to buy a home. In contrast, Baby Boomers are less influenced by mortgage rates overall, 41% of Baby Boomers say that mortgage rates do not impact their decision to buy a home. Notably, only 2% would consider purchasing a home with mortgage rates exceeding 6%. Most, 63%, are looking for rates below 5.0% before they would consider purchasing a home.
The survey also explored how homeowners finance their home purchase. A majority (57%) across all generations have utilized personal savings, while 15% have accessed personal investments or retirement accounts. Additionally, 12% leveraged gifts or loans from family members. Among those planning to buy a home, one in four intend to use retirement accounts or personal investments for financing.
"Across much of our research we see a trend where potential homebuyers feel stuck when it comes to buying a home due to their current mortgage rate," said Hannah Jones, senior research analyst, Realtor.com®. "Mortgage rates on top of an insufficient supply of budget-friendly homes complicates the affordability picture for many homeowners, especially first time homebuyers who do not have equity from their existing home to help offset mortgage rates. However, we expect that this lock in effect will ease as more homeowners grow tired of waiting for significant rate changes and as life factors such as jobs, kids and retirements drive more to make a home purchase."
A recent Realtor.com® survey looking at potential home seller trends found similar attitudes around mortgage rates where half of the potential sellers who have a mortgage feel 'locked in' due to high mortgage rates, and that effect grows for those who have been thinking about selling for more than a year.
According to the sellers survey, more than three out of four (78%) potential sellers think interest rates will either stay the same or increase in the next 12 months. For potential sellers who think rates are going to increase, 43% say this expectation increases their likelihood to sell, and 20% say a rate increase would decrease their likelihood to sell. Interestingly, 69% of potential sellers who think rates are going to decline say this expectation increases their likelihood to sell. This suggests that potential sellers are motivated by interest rate changes and interest rates impact potential sellers likeliness to list.
Methodology: Online survey conducted on April 10-11, 2025 among a national sample of 2203 Adults ages 18+
Source: Realtor.com
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