How To Get Millennials Closer To Home Ownership
We were lucky enough to publish a piece in May stating that millennials really do want to own homes. Just a quick, potentially shocking update – they still do.
Millennials and Home Ownership
An article from HousingWire from June 5th covered the results of not only Fannie Mae research, but also from a conference held recently with highly regarded economists in attendance. The results confirm that people reaching adulthood in the 2000s are not scared in the state of this current economy to own a home.
According to the vice president of Fannie Mae, 28 percent of the population is made up of Millennials at 89 million with 5.2 million of them currently owning homes. Boomers hold the most equity valued at $6.3 Trillion, while Millennials are getting there, with almost a Trillion dollars of equity.
Nela Richardson of RedFin presented information stating that while housing market critics state Millennials are afraid or not qualified to own homes, the reality is quite different. This generation wants to wait for factors such as saving money, or waiting until their dream home is within reach.
This generation group prefers modest, single family homes close to the city and condos in the city rather than settling in a rural area. More than 50 percent were the majority, primarily wanting those small homes near downtown areas.
Millennials are obviously ready to be taken seriously. They are tired of stereotypes such as living at home with parents in their 20s is lazy. When the truth is they are doing so to save money and pay off school debts.
They know they are labeled as a generation with horrible salaries, but Millennials are resourceful – they hold multiple jobs, donate plasma, drive cars for companies like Uber, or take place in mystery shopping. They find a way to make it work. They even had a conference called Millennial Week in Washington, D.C., where 4,000 of them met up to try to change society’s perception of them.
One thing Millennials have right is their realism in wanting single family homes or condos. Being close to the city where they likely work and not owning a large amount of property are all great investments to their future.
Predatory lenders should not be an issue for savvy Millennials who do their research. The low interest FHA home loan can easily be utilized for the properties they have in mind, as well as the no down payment VA home loan for young veterans or active duty.
Something for Millennials to take into consideration is their aversion to living somewhere deemed rural. If they were to take advantage of the USDA home loan, they would have three benefits they would not originally have thought of:
One – USDA-qualified properties can often be as close by as 30 minutes to a large city. Two – The USDA home loan has no required down payment and is only for use on a modest, single family home, which is what they claim they want. Three – The USDA home loan was made specifically for those with poor credit or have a hard time obtaining lines of credit from other sources, and can be paid off over a 33 year period at a negotiable interest rate.
So Millennials can feel free to take their time. Building their credit, saving money, having a stable work history, having access to several federal home loan programs, and waiting for their dream home all make up a good homeownership plan.
Amanda Rosenblatt is a Millennial and a writer for VA Home Loan Centers in San Diego. Tell them what you think of the article over on Twitter HERE.