“Millennials are mostly first-time buyers and they are competing against repeat buyers who have more buying leverage and experience,” said Javier Vivas, manager of economic research for Realtor.com. He added that Millennials recently became the dominant group of users searching for homes on the website.
New buyers this spring will also be up against buyers who started looking last year, but still haven’t bought a home.
A shortage of available homes has driven up prices — particularly among starter homes that tend to fall within first-time buyers’ budgets.
There were 3% fewer homes on the market in February compared to a year ago, according to a recent report from Zillow, and home values are up nearly 7%.
That’s led to bidding wars and fierce competition, especially in the lower end of the market.