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BENITA D. NEWTONAs mortgage rates fell to record levels, young singles joined families and empty nesters in taking advantage.
After paying rent for more than a quarter of her life, Sara Bial decided not to let her age or lack of a husband keep her from sharing in the housing boom. This summer, the 25-year-old business analyst plunked down part of her savings and bought a Feather Sound condo overlooking a lake and golf course.
"I got mixed reactions from family and friends when I decided to buy a house," Bial said. "But then they realized that this just made sense for me, despite my age."
Spurred by the hottest real estate market in decades, many of the new kids on the block are closer to voting age than retirement. Up-and-comers under 25 have been the fastest-growing home ownership segment for 10 years, doubling in size to 1.5-million between 1993 and 2002, according to U.S. Census data and National Association of Realtors analysis. Nearly a fourth of homeowners are under 25, compared with 14.8 percent in 1993.
Once a status reserved for the settled and married, homeownership is attracting the young and trendy. Single women were the second largest segment of home buyers in the first quarter of 2003, buying 21 percent of the homes purchased, according to a new survey by the Realtors group. Single males were 11 percent of buyers.
Phil Rogers, broker and owner of Realty Executives in Clearwater, said his firm closed on two homes, both in the $300,000 range, for single twenty-somethings last Friday. Rogers said rapidly appreciating prices, rock-bottom interest rates and marketing programs that make it conducive for people to buy with little to no money down are attractive to any age group.
"There's a feeling that if it's affordable now, I better hurry up and buy, because five or 10 years from now, it might not be as easy," Rogers said. In fact, mortgage rates have been inching up in recent days, which may calm home-buying ardor among all age groups.
Rogers said the trend toward youthful home buyers is also evidenced in a weakening upper-end rental market.
"A lot of tenants are realizing that instead of paying $1,000 or $1,500 in rent, they could be making a substantial mortgage payment," Rogers said. "You see all these banners for free TVs or a free month's rent if you sign a lease. I haven't seen things like that seen since the '80s."
Bial was spending nearly $800 a month for her one-bedroom apartment in St. Petersburg. The same payment now covers the mortgage and most of the condo fees on her new two-bedroom, two-bath home, which she bought on a five-year adjustable rate mortgage to leave her options open.
Bial set out four months ago to buy a house, but found that a condo better fit her lifestyle.
"I went to South Tampa thinking it was a young area, but all the places seemed too family oriented," Bial said. "Everywhere I looked, there was a guy with a kid on his shoulders."
Casey Bellison, development manager with VLC Venture, which is building Victory Lofts in downtown Tampa, said there's been a mix of empty nesters and what he called the under-26 crowd buying the lofts, which start at $189,000. To capture that younger market, the group has focused on creating a strong Web presence, advertising in Gen-X publications and sponsoring Hyde Park music festivals.
But Michael Bindman, broker and vice president of Keller Williams Gulf Coast Realty in Seminole, said many young house hunters in the Tampa Bay area are buying single-family homes instead of condos or lofts. The company recently helped an 18-year-old single mother buy a home as well as a single teacher who had just graduated from college.
"They want to have the family room and the extra bedrooms so that the space won't be so limited if they decide to have children," Bindman said. "And they're not just buying homes that are inexpensive. Some of these young people are buying homes that are worth a couple hundred thousand dollars."
The young buyer trend could mean big bucks for home stores, which are stocking up on chic furnishings that fit both the starter budget and tight spaces in condos and lofts. But other businesses could feel the pinch if these young nesters pour too much money into their pads. Those under 25 have been spending less on clothes, cars and entertainment in recent years, while spending more on housing and household furnishings, according to an analysis by economy.com.
- Information from the Wall Street Journal was used in this report. Benita Newton can be reached at bnewton@sptimes.com or 727 893-8318.