Welcome to our Mortgage Minute series, where our partners over at Midwest Lending break down the particulars of home financing, and bring a personal touch to the lending industry, as only they can.
Did you know that the Millennial generation represents the largest group of homebuyers in America? It’s true: Gen Y makes for 37% of recent home buyers in this country. Gen X is next, albeit significantly behind at 24%. In fact, according to a recent report by the National Association of Realtors, 2019 will be the sixth consecutive year that millennials led the U.S. home buying charge.
So why are millennials (born between 1980 and 1994) often criticized for living too long with their parents, or only being interested in renting, when the statistics clearly paint a different picture?
The source of this unfair reputation may be answered through the results of another report, this one by Clever Real Estate. It seems that millennials are twice as likely to be stressed about homeownership than Baby Boomers, and are also much more likely to experience buyer’s remorse than older generations. This uncertainty toward ownership is sending adult children back to their parents’ homes, either out of necessity or an attempt to save money.
So what is causing this panic and confusion? The NAR stats mentioned earlier point to the following as some of the most serious millennial concerns:
- Mortgage payments are too high (41%)
- Additional maintenance after moving in (33%)
- Their property has depreciated in value since purchase (21%)
- High interest rates (17%)
- Location isn’t ideal or poor quality of school districts (14%)
Other outside factors, from student loans to financial instability, only add to the anxiety. For some, the responsibilities of homeownership are simply a bit more than they bargained for. But for this particular generation — and those that will follow — it is important to keep things in proper perspective. Yes, the stress that comes with buying a home is very real, and millennials should not overextend themselves to make a home purchase. But they should not fear the possibility, if properly educated on the process.
Many buyers today never speak with a real person when it comes to home financing, preferring to handle everything online. This can only result in a less educated home buyer, and an even less confident home owner. They need to speak with someone who has the expertise and the integrity to show them the reality that comes after being handed a set of keys. That is why speaking with an expert such as your Midwest Lending mortgage pro is so essential.
Millennials shouldn’t fear home buying — for those who are stable in their careers and ready to set down roots, homeownership can be the key to emotional and financial security later in life. They simply need to take the time to know what they are getting into, with a devoted professional by their side.
Midwest Lending is a residential mortgage broker, committed to providing their clients with the highest quality home loans, combined with some of the lowest mortgage rates available.