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Millennials have waited longer than any other generation to become homeowners, but the wait for this cohort is just about over.
According to National Mortgage News,
“Millennials, those young adults now aged 23 to 38, are now entering their peak household formation and homebuying years.”
If you’re a Millennial, you’re already well aware that you’re among a generation of those who favor fast-paced, real-time answers – and results. When you’re ready to make a decision, it’s go-time, and you probably want the latest technology at your fingertips to make it happen.
National Mortgage News agrees, stating,
“Millennials are different than previous generations—not only in their delayed homebuying but also in how they approach interactions with financial institutions, including mortgage lenders. Taking a picture of a check on their phone and depositing it without visiting a branch is not novel, it’s the way Millennials learned to do banking. They expect real-time access to account and transaction data and are frustrated when it’s not available.”
Here’s the catch – the overall speed of the homebuying process can take some time, and it might feel like it is slowing you down. When you’re ready to buy, you can make an offer and go under contract quickly, but the rest of the process might take a little longer. The same article explains why:
“When Millennials apply for a loan, the mortgage lender must qualify the borrower and determine who owns the property, how much the property is worth, and the property’s risk profile. Traditionally, this has been one of the most time-consuming and fragmented parts of the mortgage process…There are many moving pieces, each data point being sourced from a different provider, which can ultimately lead to a lengthy or delayed process.
What has historically been accepted as the process norm does not align with the expectations of the most prominent generation in the home buying market today. Millennials have come to expect rapid, digital workflows in their daily purchase decisions, and in their mind, the home buying process shouldn’t be any different.”
If you’re pre-approved for a mortgage, that will help speed things up. But the steps it takes and the time to finalize a loan with most traditional lenders may feel like an eternity to you and your generational peers. Don’t worry, though – it’s well worth the wait when you finally get the keys to your new castle!
The financial benefits of homeownership, like increasing your net worth by building equity, and the non-financial benefits, like being able to customize and improve your space, will ultimately set you on the course to happiness, success, overall satisfaction, and much, much more.
If you’re feeling like it’s go-time, let’s get together and get the process moving to determine if homeownership is your next best step.
When you’re ready to buy, you’ll need to determine if you prefer the charm of an existing home or the look and feel of a newer build. With limited existing home inventory available today, especially in the starter and middle-level markets, many buyers are considering a new home that’s recently been constructed, or they’re building the home of their dreams.
According to Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB),
“The second half of 2019 has seen steady gains in single-family construction, and this is mirrored by the gradual uptick in builder sentiment over the past few months.”
This is great news for homebuyers because it means there is additional inventory coming to the market, giving buyers more choices. The most recent data from NAHB shows,
“The inventory of new homes for sale was 321,000 in September, representing a 5.5 months’ supply. The median sales price was $299,400. The median price of a new home sale a year earlier was $328,300.”
Another added bonus is that builders are very aware of buyer demand in this segment, so they’re now building in a price range where there are more interested buyers ($299,400 instead of $328,300). With a reduced sales price and low-interest rates, today’s buyers have strong purchasing power.
If you’re thinking of buying a home, you may want to consider a new build to meet your family’s needs. Let’s get together to discuss the process and review what’s available in our area.
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A considerable number of potential buyers shy away from the real estate market because they’re uncertain about the buying process – particularly when it comes to qualifying for a mortgage.
In order to qualify in today’s market, you’ll need a down payment (the average down payment on all loans last year was 5%, with many buyers putting down 3% or less), a stable income, and a good credit history.
Once you’re ready to apply, here are 5 easy steps Freddie Mac suggests to follow:
Do your research, reach out to professionals, stick to your budget, and be sure you’re ready to take on the financial responsibilities of becoming a homeowner.
A considerable number of potential buyers shy away from the real estate market because they’re uncertain about the buying process – particularly when it comes to qualifying for a mortgage.
In order to qualify in today’s market, you’ll need a down payment (the average down payment on all loans last year was 5%, with many buyers putting down 3% or less), a stable income, and a good credit history.
Once you’re ready to apply, here are 5 easy steps Freddie Mac suggests to follow:
Do your research, reach out to professionals, stick to your budget, and be sure you’re ready to take on the financial responsibilities of becoming a homeowner.
The gap between the increase in personal income and residential real estate prices has been used to defend the concept that we are experiencing an affordability crisis in housing today.
It is true that home prices and wages are two key elements in any affordability equation. There is, however, an extremely important third component to that equation: mortgage interest rates.
Mortgage interest rates have fallen by more than a full percentage point from this time last year. Today’s rate is 3.75%; it was 4.86% at this time last year. This has dramatically increased a purchaser’s ability to afford a home.
Here are three reports validating that purchasing a home is in fact more affordable today than it was a year ago:
CoreLogic’s Typical Mortgage Payment
“Falling mortgage rates and slower home-price growth mean that many buyers this year are committing to lower mortgage payments than they would have faced for the same home last year. After rising at a double-digit annual pace in 2018, the principal-and-interest payment on the nation’s median-priced home – what we call the “typical mortgage payment”– fell year-over-year again.”
The National Association of Realtors’ Affordability Index
“At the national level, housing affordability is up from last month and up from a year ago…All four regions saw an increase in affordability from a year ago…Payment as a percentage of income was down from a year ago.”
First American’s Real House Price Index (RHPI)
“In 2019, the dynamic duo of lower mortgage rates and rising incomes overcame the negative impact of rising house price appreciation on affordability. Indeed, affordability reached its highest point since January 2018. Focusing on nominal house price changes alone as an indication of changing affordability, or even the relationship between nominal house price growth and income growth, overlooks what matters more to potential buyers – surging house-buying power driven by the dynamic duo of mortgage rates and income growth. And, we all know from experience, you buy what you can afford to pay per month.”
Though the price of homes may still be rising, the cost of purchasing a home is actually falling. If you’re thinking of buying your first home or moving up to your dream home, let’s connect so you can better understand the difference between the two.
The gap between the increase in personal income and residential real estate prices has been used to defend the concept that we are experiencing an affordability crisis in housing today.
It is true that home prices and wages are two key elements in any affordability equation. There is, however, an extremely important third component to that equation: mortgage interest rates.
Mortgage interest rates have fallen by more than a full percentage point from this time last year. Today’s rate is 3.75%; it was 4.86% at this time last year. This has dramatically increased a purchaser’s ability to afford a home.
Here are three reports validating that purchasing a home is in fact more affordable today than it was a year ago:
CoreLogic’s Typical Mortgage Payment
“Falling mortgage rates and slower home-price growth mean that many buyers this year are committing to lower mortgage payments than they would have faced for the same home last year. After rising at a double-digit annual pace in 2018, the principal-and-interest payment on the nation’s median-priced home – what we call the “typical mortgage payment”– fell year-over-year again.”
The National Association of Realtors’ Affordability Index
“At the national level, housing affordability is up from last month and up from a year ago…All four regions saw an increase in affordability from a year ago…Payment as a percentage of income was down from a year ago.”
First American’s Real House Price Index (RHPI)
“In 2019, the dynamic duo of lower mortgage rates and rising incomes overcame the negative impact of rising house price appreciation on affordability. Indeed, affordability reached its highest point since January 2018. Focusing on nominal house price changes alone as an indication of changing affordability, or even the relationship between nominal house price growth and income growth, overlooks what matters more to potential buyers – surging house-buying power driven by the dynamic duo of mortgage rates and income growth. And, we all know from experience, you buy what you can afford to pay per month.”
Though the price of homes may still be rising, the cost of purchasing a home is actually falling. If you’re thinking of buying your first home or moving up to your dream home, let’s connect so you can better understand the difference between the two.
