Millennials tend to get a bad rap. Perceived by the media and older generations as fun loving and care free, the millennial footprint in the housing market would seem to be quite small. With Millennials investing in ‘tiny homes’ and renting instead of being chained to a mortgage.
Millenials. Walking around like they rent the place.
— Spence (@SpenceDen) January 3, 2018
That couldn’t be further from the truth.
According to realtor.com, the housing market is in the middle of two massive demographic waves, millennials and baby boomers – that will power demand for at least the next 10 years.
Millennials (the largest generation in U.S. history) are reaching that sweet spot in their 20s to 30s when they’re settling down and starting families, motivating them to buy. Millennials could make up 43% of home buyers taking out a mortgage by the end of 2018, up from an estimated 40% in 2017, based on mortgage originations. That 3% uptick could translate into hundreds of thousands of additional new homes. As inventory starts to rebound in late 2018 and in years to come, first-time home buyers will likely make up an even larger share of the market.
They probably shouldn’t wait too long to buy, either—mortgage rates are expected to reach 5% by the end of 2018 due to stronger economic growth, inflationary pressure, and monetary policy normalization. (See more)
It seems millennials are seeing the value in purchasing a home rather than wasting their money on renting…
So whats next?
If you interested in purchasing your first home, now is the time to do it. But you need to know where to get started.
Find Out What You Can Afford
Many young people rent because that’s what they’re familiar with. They rented a place in college, they rented an apartment after college in a hip part of town. Renting seemed to be the only option.
Now that their careers are moving forward (and living in close proximity to bars isn’t a main concern), buying a home is the logical next step.
Before you start looking for dream homes, you need to know what you can afford. There are tools available that can help you figure out what your monthly mortgage payment will be, like this mortgage calculator
You might be surprised to find out that your monthly mortgage payment is less than your current rent. And unlike rent, your mortgage payment will go towards paying your home off instead of into your landlord’s pocket.
Find A Realtor
Millennials are, for the most part, pretty tech savvy. There are a number of apps and websites that allow you to view a countless number of listings. While these aren’t necessarily bad, they can be misleading, and make you believe you should do this home buying thing on your own.
But why would you?
Hiring a Realtor not only makes the home buying process easier, it protects you. A Realtor is in your corner to not only help you find the home you’re looking for, but to also walk you through the mountain of ever-changing legal documents and keep you from getting screwed over.
The best part? Hiring a buyers agent doesn’t cost you a dime!
So when you’re ready to purchase a home, shop around, ask friends and family who they used, research Realtors in your area, or just contact me. You won’t regret it.
Needs and Wants
Now that you know what you can afford, it’s time to nail down your needs and wants. A needs and wants list is a simple tool that will not only help you identify what’s most important to your home search, it will also keep you from over buying. You can access a Needs and Wants list HERE.
Begin Your Search
As I said before, there are a TON of different sites and apps out there to help you with your home search. These sites can be great for looking at pictures, researching areas and school systems, etc. The main problem with many of these sites is that they aren’t updated as regularly as your Realtor’s (FMLS) system.
If I had $1 for every time a client found their dream home on a real estate site only to have their dreams crushed when told it was no longer available, I’d have a lot of dollars.
Your buyer’s agent will be able to set you up with a personalized portal that will send you the most up-to-date listings that meet your specific criteria (insert Needs and Wants List). This will help you dramatically by making sure you don’t miss out on an amazing home, and by de-cluttering your search.
- Find The Perfect Home
At this point you know what you can afford, and you and your Realtor are on the same page, this is where the fun begins. Armed with your pre-qualification letter from your lender and a list of homes, it’s time to get out there and find that perfect place. Statistically you’ll only do this once every five to seven years, so enjoy it.
And if you need any help or have any questions at all, please feel free to contact me HERE. I would love the opportunity to help guide you through this process.