The term Millennial applies to young adults born between the years 1982 – 2004. Recent trends show that a majority of Millennials have not shown much interest in investing and buying a home of their own and would rather rent.
Annual homeownership rates across all generations declined after hitting their peak 10 years ago. One of the contributing factors to that was the housing market collapse, which lead to the recession. But a recent study of millennials found that they just don’t want to buy a house. The surveyed millennials were not asked for reasons why, but there are some good guesses. Young adults are getting a later start on marriage – per the census bureau. The median age of a first marriage for men is 29 and 27 for women.
Millennials still facing significant debt
Another reason why is the mounting student loan debt that millennials are still facing. Another survey was done with student loan borrowers and a majority said that student loan debt hindered them from buying a home. A high percentage of millennials in the same survey said that their student loan debt even prevented them from moving out of a family member’s house.
There are ways, however, for millennials that are interested in purchasing a home to do so. One main reason that prevented younger people from purchasing a home was the fact they could not afford a down payment. The answer to this would be to apply for an FHA loan, which requires for only 3% down of the purchase price. Paying 3% on a first home is not an insurmountable amount of money. For younger borrowers who have minimal credit history, banks are now considering someone’s mobile phone and cable payment history. Having a car loan and credit card can also help boost your credit score.
Millennials vs. Gen Xers
A 20 year history still shows that millennials are at or near the same rate of homeownership as the Gen Xers. The biggest thing for millennials is to not overextend themselves and live within their means. Looking at the numbers, it seems like they are.
As Schwartz Realty, we pride ourselves in helping first time homebuyers make smart decisions. Please call us at (702) 485-1400 for a free consultation with the top Las Vegas realtors and agents and discover what kind of home makes the most sense for you and your needs.