The Millennial homebuyer, Â a consumerÂ 18 to 34 years old, makes up 42Â percentÂ of the homebuyers today.Â This generation is making a huge impact on the housing business. It also faces unique challenges when buying a home.
As a Millennial, you grew up during the Great Recession (December 2007 â€“ June 2009). There's a good chance you were touched byÂ high unemployment, student loan debt and tight credit standards.
Donâ€™t let these challenges cause you to shy away from buying a home. Times have changed, and buying a home today is becoming easier and more affordable.Click to see today's rates (Feb 22nd, 2017)
Young adults todayÂ are in excellent shape to buy a home. Rates are still extremely low by historical standards, and home values continue to appreciate. As you can see from the chart below, however, some markets make homeÂ buying easier than others.
Here are some essential tips for millennials beginning their journey towards homeownership.
Unlike their parents, studies show that millennials tend to rent for longer periods of time before they take the home buying plunge.
While waiting can certainly make sense in some situations, it can also do more harm than good.
Why?Â Mortgage interest rates are on the move, and so are housing prices.
According to Freddie Mac, 30-year fixed interest rates have increased to an average of 4.32 percent, up a half percent over Novemberâ€™s 3.77 percent average rate.
On a $200,000 home, with a five percent down payment, your mortgage payment would be $54 more per month. Over five years, that means you spent over $3,200 more than those that bought just a few weeks earlier.
To protect against further rate increases, it could be wise to find a home and lock in your rate soon.Click to see today's rates (Feb 22nd, 2017)
TheÂ technology at your fingertipsÂ might (you think) lessen the value of an experienced real estate agent to a Millennial homebuyer.
Although under-30s are greatÂ at getting things done with very little help, an experienced real estate professional can makeÂ finding and buying the right home easier -- especially for a first-time buyer.
After all, why not hire a person who has more education and expertise in real estate than you? As Henry Ford once said, when you hire people who are smarter than you, it proves you are smarter than they are.
The right agent offersÂ invaluable neighborhood knowledge and is up-to-date on an area's market conditions and potential as an investment.
Good agents guide you through the process of negotiating a price, securing other concessions (like a home warranty), and sorting out who pays which closing costs.
A common challenge for many young college graduatesÂ is having sizable student loan debt and little savings. As such, you may assume you donâ€™t have enough cash or income to afford to purchase a home.
Some Millennials are waiting longer than their predecessors to purchase their first home.
Recent studies, however, show that youâ€™re likely to pay more in rent than you would for a mortgage payment.
Contrary to popular belief, you donâ€™t need 20 percent down to buy a home â€“ you donâ€™t even need five percent, actually.
Some programs offer zero down options. Even if you donâ€™t qualify for 100 percent financing,Â you may qualify for 95 to 97 percent loans. And many programs allow some or all of your down payment to be borrowed or gifted if it comes from an acceptable source.Click to see today's rates (Feb 22nd, 2017)
Your parentâ€™s generation didnâ€™t have access to the seemingly unlimited amount of data. You, however,Â can findÂ everything you need with a quick text, email or Internet search.
It is estimated that nine of ten implement online resources for home buying education, but online information barrage canÂ have its downside.Â Sometimes, too much information can cause uncertainty for homebuyers.
Do your online research, and seek advice from friends, family and real estate professionals. ButÂ don't get overwhelmed and let a good deal pass you by.
Millennials shouldnâ€™t hesitate to become homeowners. With todayâ€™s technology,Â and the guidance of a trusted real estate agent, the Millennial homebuyer hasÂ the tools to successfully navigate the home buying process.
Find out todayâ€™s mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.Click to see today's rates (Feb 22nd, 2017)
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2017 Conforming, FHA, & VA Loan Limits
Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)