Millenial Buyer Mortgages

We continue to be bombarded with messages about millenials not being able to buy homes due to high down payment requirements and high credit scores being needed. 
The actual numbers for the first half of 2015 clearly disprove the fear merchants:

To understand more about what this means to your unique situation, call, text or email me.

Rents continue to outpace wage increases

Don’t Get Caught In The Renter’s Trap

 Tuesday August 25th, 2015  First Time Home Buyers, For Buyers

There are many benefits to homeownership. One of top ones is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

The National Association of Realtors (NAR) released their findings of a study in which they studied“income growth, housing costs and changes in the share of renter and owner-occupied households over the past five years in metropolitan statistical areas throughout the US.”

Don’t Become Trapped

The study revealed that over the last five years a typical rent rose 15% while the income of renters grew by only 11%. If you are currently renting, this disparity in growth could get you caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment.

The average renter in the United States pays 30% of their income on housing compared to that of a homeowner who can expect to spend 15%.

In many metro areas the percentage of income spent on housing is even higher and continues to rise every year. Like in San Francisco, CA, where the average renter spends 59% of their monthly income on housing or nearly 65% in Boston, MA.

Homebuyers who purchased their home over the same five-year period locked in their housing costs and were able to grow their net worth as home values have increased and their mortgage balances have gone down.

Know Your Options

Perhaps, you have already saved enough to buy your first home. HousingWire reported that analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

As we have reported last week, over 60% of Millennials who recently bought a home put down less than 20%; 36% put down less than 5%. Your dream home may be more attainable than you ever imagined!

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

For help planning your escape, call, text or email.

Future Homeowners Still Share the American Dream

Two recently released reports indicate that both young adults (Millennials) and teenagers (Generation Z) still see homeownership as an important piece of their future success.

A report by The Demand Institute, Millennials and Their Homes: Still Seeking the American Dream, revealed that the Millennial Generation is optimistic about their financial future and still believe in homeownership. The findings were based on a survey of millennial households (ages 18 to 29).

The report predicted that:

• 8.3 million new Millennial (Gen Y) households will form in the next five years
• $1.6 trillion will be spent on home purchases by Millennials and $600 billion on rent over the next five years

Millennials optimistic about their finances and homeownership

Of those surveyed:

• 74% expect to move within the next five years
• 79% expect their financial situation to improve
• 75% believe homeownership is an important long-term goal
• 73% believe homeownership is an excellent investment
• 24% already own their home and
• An additional 60% plan to buy a home in the future
• 44% do think it would be difficult to qualify for a mortgage

What about the next generation (today’s teenagers)?

A recent survey by Better Homes and Gardens® revealed that Generation Z (teens ages 13-17) is very traditional in their views toward homeownership and is willing to sacrifice to attain the American Dream.

Findings from the survey show:

• 82% of Gen Z teens indicate that homeownership is the most important factor in achieving the American Dream.
• 89% said owning a home is part of their interpretation of the American Dream
• 97% believe they will own a home
• 77% percent chose owning a home over owning a business

Bottom Line

It seems that the belief that homeownership as a huge part of the American Dream still beats in the hearts of the young people of this country.

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