Don’t believe everything you read about the housing preferences of the millennial generation. Sure they have been in no hurry to enter the housing market, as some market watchers anxiously point out; preferring instead to rent. But that doesn’t mean forever. Millennials and Renting In reality, millennials rent because they are young, unmarried, starting careers; and in need of instant mobility in order to pursue upward mobility. Slow job growth and student debt have also been major hindrances, but jobs are now plentiful and employed millennials with college degrees are said to earn twice the income of their non-degreed counterparts—according to the Institute for Education Statistics. Plus, society no longer exerts undue pressure on young people to settle down, marry and start families—circumstances that used to put them on a much earlier path to home ownership. Millennials and Home Ownership But now, as older millennials turn 35, they are rapidly warming to the idea of home ownership as they finally wed, have kids, get serious about saving for their new families’ futures; and begin to eye suburban neighborhoods where they can often buy more home for less. They also have much greater confidence in the long term prospects of building wealth through home equity after having witnessed the housing market bounce back rather impressively from one of its worst ever downturns. As such, they now see home ownership as a reliable way to simultaneously provide nests for their families and nest eggs for their future. A new generational survey issued in March by the National Association of Realtors® reports that for the third year in a row the largest concentration of recent homebuyers were millennials—who represented 35% of all buyers (up from 32% in 2014)—more than the combined number of younger and older baby boomers (31%); and Generation X’ers (26%). They also dominate the first-time homebuyer market, with nearly a 70% market share. It goes without saying that in addition to needing more room to spread out, millennials have also grown weary of fast-rising rents; and watching helplessly as larger and larger chunks of their paychecks end up feathering their landlords’ nests, rather than their own. Millennials and Living in Sarasota A recent report in the Sarasota Herald-Tribune reveals that the average rent for a two-bedroom apartment in Sarasota has climbed from $1,180 to $1,430 per month in just the past year. The same range of monthly expenditure, if applied to a 30-year, fixed-rate mortgage, could purchase a single-family home at today’s median price of $253,000 in Sarasota County. Millennials and Mortgages More importantly, even as mortgage interest rates remain historically low, mortgages themselves have become more affordable and accessible. Conventional and government loan packages—with down payments as low as 3 to 5%—now offer first time buyers an easier path to home ownership. However, this does not mean that it has become easier to qualify for a mortgage. Would be borrowers must still demonstrate steady employment, income stability, credit worthiness; and be prepared to supply the financial documentation that proves it. If buying a home to free yourself from the dead-end cycle of paying rent has been a goal, it may now be more attainable than you thought. Contact the experts at MSC Mortgage to learn more about mortgage products that are especially geared for first-time home buyers; and to begin the loan application process. And since we are well aware that millennials relish the time-saving convenience of achieving as much as they can online, you can begin the mortgage qualifying process at MSCMortgage.com; then launch your home search for Sarasota real estate at michaelsaunders.com. That said, welcome home!
Learn more about the millennial homebuyer in this Saunders in 60.
