Rising mortgage rates have certainly reshaped today’s housing market, making many potential buyers hit the pause button—but not everyone is waiting it out. Surprisingly, millennials are the one generation pushing forward with their plans to buy.

While rates remain high—hovering around 6.86% as of late May, according to Freddie Mac—many millennials aren’t letting that stand in the way of achieving their homeownership goals. In fact, recent data shows a growing number of them are preparing to make a move in the next six months, even as other generations hold back.

Millennials Lean In, While Others Pull Back

Millennials—typically defined as those between ages 29 and 44—are showing the strongest intent to buy among all age groups. Their share of potential buyers has increased compared to late last year, signaling renewed determination despite affordability challenges.

By contrast, Gen Z buyers (ages 13–28) are showing more hesitation. High borrowing costs and economic uncertainty are making younger would-be buyers more cautious. Many in this age group are opting to continue renting rather than locking in a mortgage they may not be comfortable with.

Older generations, particularly baby boomers (ages 61–79), are largely unfazed by today’s rates. A significant portion of boomers report that mortgage rates aren’t a factor in their decision to buy. However, most are still hoping to see rates below 5% before they consider a purchase—something we haven’t seen since 2022.

How Buyers Are Financing Their Homes

Across generations, personal savings remain the most common source of funding for a home purchase. But with prices high and down payments steep, many buyers are also turning to alternative sources:

• 15% of buyers are dipping into retirement savings or personal investments

• 12% are receiving gifts or loans from family members

Interestingly, among those planning to buy soon, roughly 25% say they’ll rely on retirement accounts or investments to help fund their purchase.

What This Means for San Francisco Buyers

In competitive markets like San Francisco, where affordability is always a topic of conversation, the resolve of millennial buyers is a trend worth watching. If you’re a prospective buyer feeling discouraged by high rates, it may be helpful to know that others are finding ways to make it work—often by getting creative with their financing, adjusting expectations, or timing their move strategically.

Thinking about buying or selling?

Let’s talk about your goals and how we can navigate today’s market together. Reach out today to schedule a one-on-one consultation.

 

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Source: sfgate.com