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The Wave of Millennial Home Buyers is Coming

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Every industry is trying to solve its own version of the “millennial riddle”.

The biggest demographic wave in history continues to crush everything in its path, leaving businesses and investors scrambling to adapt. First it hit retailers, restaurants, and media, but soon it will leave its mark on other established industries such as finance, healthcare, and real estate.

But the wave hits each sector in a different and unique way.

In the case of real estate, the millennial buying frenzy was already supposed to have kicked off – but it’s now on hold for a variety of reasons. We know that millennials still definitely want to buy homes, but the reality is that they are currently set back by challenges such as student loans, a low savings rate, and housing prices.

As a result of this unexpected lag, the home ownership rate in the United States has collapsed to record-tying low of just 62.9%.

Millennial Home Buyers are Coming, but Delayed

Today’s infographic from FirstTimeHomeFinancing shows the predicament that many millennials find themselves in: they believe that owning a home is tied to the American Dream, but lack the wherewithal to get into the market.

Millennial Home Buyers

A whopping 65.3% of millennials associate the American Dream with buying a home – more than any other generation. However, many millennials are not able to make home ownership a reality just yet.

Why the Wave is Delayed

Despite most millennials entering their twenties and early-thirties, home ownership is still a long way out for many of them. Almost one-third (33.2%) of millennials believe they are 3-5 years out from buying a home, while another 24.4% think that they are at least five years away.

Why are they waiting? The majority of potential millennial home buyers are strapped for cash with less than $1,000 in savings. Meanwhile, the average student loan balance is $37,173 per student, which makes taking out a mortgage more challenging and less responsible.

There are other factors, too. The median age for marriage is as at a record-high, and it’s harder to enter the real estate market these days. Credit standards have changed since the Financial Crisis as well, making it more difficult to get approval.

While this is all a little bit discouraging, we do know that 91% of millennials want to be eventual homeowners. When the timing is right to make that plunge, it will send ripples throughout the market.

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Charted: Stock Buybacks by the Magnificent Seven

While Apple carried out $83 billion in stock buybacks over the last four quarters, Amazon and Tesla didn’t report any.

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Nightingale chart of stock buybacks for the magnificent seven stocks showing that Apple had the most buybacks of $83 billion.

Charted: Stock Buybacks of the Magnificent Seven

By 2025, Goldman Sachs predicts that total U.S. stock buybacks will exceed $1 trillion. The bank sees this growth being driven by strong tech earnings growth and lower rates.

But what are buyback amounts like for the largest tech companies today?

This graphic looks at the total value of shares each Magnificent Seven company has repurchased in the last four quarters using data from their latest financial statements.

What is a Stock Buyback?

A stock buyback is when a company buys their own shares to reduce the number of available shares on the market. Companies may choose to buy back stock to return value to shareholders. Having fewer shares available improves earnings per share, and may drive up the stock price.

Buying back stocks can also come with risks, such as using up cash that would otherwise be put toward growing the business.

Stock Buybacks of Tech Titans

We gathered data from company financial statements to see how stock buyback amounts differed among the Magnificent Seven. Each total represents what companies reported from June 1, 2023 to June 1, 2024.

As we can see, the tech companies in the Magnificent Seven have been the ones buying back their stock over the past year.

CompanyTotal Stock BuybacksBuybacks as a % of Market Cap
Apple$83B2.8%
Alphabet (Google)$63B2.9%
Meta$25B2.0%
Microsoft$20B0.6%
Nvidia$17B0.6%
Amazon$0B0.0%
Tesla$0B0.0%

Values rounded to the nearest billion. Company market caps are as of June 6, 2024.

Apple had by far the most share repurchases, raising its diluted earnings per share from $1.26 to $1.53. Going forward, Apple authorized an additional $110 billion for share repurchases, a U.S. record. The board says the repurchases are in light of their “confidence in Apple’s future and the value we see in our stock.”

On the flip side, both Amazon and Tesla did not issue stock buybacks in the last four quarters. Amazon’s CFO Brian Olsavsky recently emphasized the company’s strategy of reinvesting in the business. He says Amazon is focused on reducing debt and building data centers to take advantage of AI.

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