THE WEEK IN REVIEW

Welcome to my weekly newsletter featuring a personal note on the ever-evolving world of real estate along with a few newsworthy updates. Enjoy!

40 is the new first time homebuyer

This past week's big story was that the average age of first time home buyers in the US hit the ripe old age of 40. It is unfortunate that the cost of homes (relative to incomes) is making home ownership something that happens later in life. But I think there is more to it than cost - for many I think it's a reorienting of life choices. As the mother of three adult children, and a real estate advisor to many couples buying their first home, I interact frequently with people in their late 20's and early-mid 30's - both personally and professionally.

When I was 30, I was married with two children and a few years into home ownership. At that time, we were far from alone in our goal to own a home at a relatively young age, along with the desire to spend time and energy fixing up, landscaping and painting. At that time, owning a home meant a lot of other activities - eating out, shopping, vacationing - were kept to a minimum. But none of us questioned whether the sacrifice was worthwhile.

I think that is changing... for a host of reasons. I am in Denver this week helping out my son and daughter-in-law with their beautiful new baby girl (one week old today!). I witness different messages and priorities for their generation.

1. Today, more than ever, people are being messaged 24/7 to RENT, RENT, RENT. Media, influencers and presumably companies that benefit from a strong pool of people wanting to rent all post and write about home ownership "not being worth it".... you could make more money in the stock market the thinking goes!

2. The average age for marrying in the US in 1990 was around 26. Today that has jumped to around 32 - up roughly 23%.

3. The percentage of those graduating college in the US is up 80% since 1990. Many are more focused on building careers and wealth before settling down. The desire to have things "figured out" (financially, emotionally, otherwise?) seems much stronger.

4.  The average age couples have a child is up close to 10% too since 1990. Their access to information, support and resources is exponentially higher.

5.  Like it or not, technology not only showcases everything one can spend money on, it makes it all too easy to gratify one's desire almost instantly. Delay, discipline and saving are hard... with little to showcase in the moment.

6. Social media and FOMO also fuel wanting that DREAM HOME as your first home..... Many are prepared to wait longer, save more, and then buy what they really want. Those younger and/or first-time homebuyers willing to do work, or to see past a dated aesthetic, are very few and far between.

If you are 40 today, you are a Millennial - a generation projected to inherit more than any other generation, potentially becoming the wealthiest generation in U.S. history. Trillions of dollars are expected to be transferred from the Baby Boomer and Gen X generations, with millennials set to receive the largest share. We are only just beginning to see how this transfer of wealth will impact life and family choices, and the housing market moving forward.

real estate & the news

•  63% of Austin voters shot down a proposal to increase the property-tax rate by 20%, which would have raised about $110 million a year in local revenue. The average tax bill for city services in Austin is about $2,124, up from $973 in 2015. A typical resident might pay another $4,000 a year in school district taxes. Voters approved a 20% increase 5 years ago to expand the transit system and ease traffic as thousands of newcomers moved in. Yet the city still faces a $33 million deficit going into 2026. Elsewhere in Texas, voters rejected 25 of 44 proposals to raise school-district taxes. (WSJ)

• There are around 35,550 commercial aircraft globally.....and around 24,000 private jets. Private jets specifically make up one out of every six flights handled by the FAA. The average airline passenger pays a 7.5% tax on their ticket price, plus a charge that can go up to $4.50, goes toward the FAA’s Airport and Airway Trust Fund. Private jet flyers contribute just 2% of the taxes that make up that fund..... (FAST COMPANY)

• Among those with $5 million or less in wealth, only 22% use a wealth advisor, compared with 44% for those with $25 million or more. (CNBC)

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Lee Arrowood

Principal, Arrowood Advisory at Compass

M: 202.251.3175

O: 202.448.9002

lee.arrowood@compass.com

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