In the past few months, we’ve had several first-time homebuyers tell us that ever-increasing rent influenced their decision to buy a home. This didn’t come to a surprise to us here at Mortgage Specialists. In March of 2017, the average rent in Omaha was $927, which is more than or close to many of our clients’ monthly payments.
In March of 2017, the average rent in Omaha was $927.
If you’ve been paying attention to the housing market the last few years, one of the biggest concerns has been when Millennials will begin to buy homes. Sure, Millennials have been buying homes, but it has been a smaller percentage than previous generations. Below are three reasons this generation seems to be delaying homeownership.
The fact of the matter is that Millennials are saddled with more student debt than any other generation. Did you know that 63% of Millennials have over $10,000 in student debt? Student debt has deterred many from purchasing a home, whether it was because they couldn’t qualify for a mortgage or they couldn’t get the rate they desired.
Did you know that 63% of Millennials have over $10,000 in student debt?
But there is hope on the horizon. Regulations recently changed, making it easier for those with student debt to qualify for homes they may not have been able to qualify for in the past.
Lack Of Down Payment
This goes hand-in-hand with our previous point. Millennials in debt to their ears often don’t have the means to save for a down payment. We’ve also found that many of our first-time homebuyers are adamant about sticking to the traditional 20% down payment. The truth is, times have changed and putting down less than 20% isn’t an uncommon occurrence.
One way we’ve seen first-time homebuyers circumvent this issue is through down payment gifting. This is when a relative gifts money for the down payment to the buyer. While it does require additional paperwork, this is a great option for those without the funds for a down payment.
Waiting To Get Married
Millennials have pushed marriage off more than previous generations. While marriage isn’t a prerequisite for first-time homebuyers, we’ve found that many buyers in the past chose to wait for this life event to purchase their first home.
As you can see, this generation has many hurdles preventing them from becoming first-time homebuyers. However, rising rental rates are more than enough of a reason to buy. In fact, right now is a great time to buy and keep those monthly payments affordable because home prices are relatively low. However, this window will soon close as home prices continue to rise.
Now is the time to buy to keep your monthly payments affordable.
We’d recommend looking into your options to see if homeownership could help keep your monthly payments affordable. If you’re interested in buying, please fill out our online application. And, as always, feel free to contact us with any questions you may have!
2022: We follow up on this blog in the video below.