As of last year, Millennials are the largest population block in America. The Pew Research Center defines Millennials as those Americans born from 1981 to 1997. Instead of being giddy about this juggernaut of consumers, industry analysts seem impatient and disappointed. “In the case of real estate, the millennial buying frenzy was already supposed to have kicked off – but it’s now on hold for a variety of reasons,” said Jeff Desjardins of Visual Capitalist.
What does he mean by “supposed to have kicked off”? As reported by the NAR this year, Millennials comprise the largest share of home buyers – and have been for the past four years! So why the seemingly weary-from-waiting attitude from market analysts?
Because of analysts’ great expectations. Millennials outnumber the vaunted numbers of the Baby Boomers. Analysts were expecting a tsunami and are getting only a tidal change.
Put credit where credit is due. The Millennials have had to surmount more roadblocks to homeownership than any generation of Americans this side of World War II! The challenges include:
- The front edge of Millennial America graduated from college just in time for the Great Recession, the greatest economic downtown since the Depression. Anemic economic growth and low wages make saving for a home down payment harder than ever.
- Because of this financial strain, Millennials are marrying later – which means they don’t have the power of a two-income household. The average age for a first marriage in this country has increased by two years for both men and women since 2007!
- Millennials not only have a lower savings, they have higher debt. An article on Business Insider’s website reported that “the average student loan balance is $37,173 per student, which makes taking out a mortgage more challenging and less responsible.”
- To make matters worse, Millennials are facing a housing shortage. As reported in REALTORMag – the official magazine of the National Association of Realtors - the reasons for the inventory shortage include low new construction, landlords making more money from renters, and the fact that many homeowners are still underwater.
- There are ways for Millennials to finance a home without the traditional 20 percent down payment. For example, Ruoff offers lots of loan programs to meet your needs. But Millennials with lower down payments still must compete with home buyers who have 10 or even 20 percent for a down payment.
Despite this, experts still are predicting an incredible year of Millennial home buying in 2017. For starters, building permits for new construction have been topping a million per year since 2014 – the best numbers since 2007 and double the building permits of 2009! Also, Millennials are exploring alternatives, creating the so-called “Tiny House Movement.”
The fact that Millennials make up the greatest share of home buyers – for the fourth year in a row - says it all. Obviously, Millennials are surmounting their challenges! Where there’s a will, there’s a way!
Remember these wise words. “Just because you took longer doesn’t mean you failed.”
If you long to buy a home, but feel this list is too relatable, give us a call at Ruoff Home Mortgage and we will look at your current situation and help you find the best loan for your needs. After all, applying for a mortgage should be simple!