With the improving housing market we are seeing more and more of the "Millennials" generation, those between the ages of 20 and 30 years old, finally interested in buying their first home.
Millennials trends are being closely watched by economists. Their sheer numbers, about 86 million, mean that this generation's consumer trends will be a determining factor in the housing market and our overall economy. Many experts have said the Millennials' reluctance to buy a home in the last few years significantly slowed the housing market recovery. Yet, a recent survey by Fannie Mae reports that 90 percent of Millennials still dream of owning their own home rather than paying rent.
HEADWINDS TO HOUSEHOLDS
The recent recession thwarted many Millennials from household formation, the life event that often spurs people to buy a home. Many moved in with parents as they struggled to find jobs and pay off their student loans. And, they put off marriage. The median age of a first marriage is now 27 for women and 29 for men according to Pew Research.
All of these headwinds to household formation have reduced the number of first-time homebuyers to 27 percent, a figure that has historically been 40 percent of the market according to the National Association of Realtors.
MILLENNIALS HOUSEHOLDS WILL START TO SURGE
As more and more of the leading cusp of the Millennial generation reaches 30, experts say their household formation will increase and they will think about homeownership more seriously. Harvard University's Joint Center for Housing Studies says that the Millennials will make up 24 million of new household between 2015 to 2025. That will significantly boost the housing market as they seek their part of the American Dream.
HELP FOR MILLENNIALS
If you are a "Millennial" and are still wondering if you should buy a home rather than rent there are a few things that might help you make your decision. Getting started now on your first home is big step toward personal wealth building and it is a solid long-term-investment. Homeownership also brings with it deductions that can say you thousands of dollars in taxes each year. Mortgage interest rates are still low, hovering just around 4 percent. There was a time back in the 1980's when many of you were born that they were as high as 18 percent. At today's low rates, housing affordability is high. The Washington State Housing Finance Commission has low cost loans for the first time homebuyers who qualify. They also have down payment assistance loans that can be paired with the first loan to responsibility get into your own home. I would encourage anyone considering buying a home, whether a Gen X, Gen Y, or Boomer, to talk to a mortgage lender and find out what you qualify for in a home. You might be surprised. Once you know your price range, your Local REALTOR will help you find that home you have been dreaming about, but thought you might even own.
Call Phil Harlan today to start building wealth in real estate.