It feels like everyone is studying Millennials. What they’re doing, what they’re buying, and especially not buying. There has been much ado about the newly released data showing less millenials are buying homes when compared to other generations at the same age range.
For example, 50% of Baby Boomers and Gen Xers purchased their first home between the ages 25 and 34, versus 37% of Millennials who bought their first home during that time frame.
Are people actually shocked by this?
Think of the economy that Millennials have lived through. Many watched their families lose quite a bit in the Great Recession. They’ve had less stability out of college, as there were less jobs available. They’ve seen the debate of healthcare being tossed around like a rag doll, with no real clarity around what the final result will be.
No wonder Millennials aren’t running out in droves to make the biggest financial investment of their lives right now.
While it’s understandable to want to delay making such a large purchase, there are numerous ways that you can still purchase a home with less risk and more reward. Studies show long-term, people that buy their first home earlier have more wealth at age 60. Home equity, contributes largely to the wealth factor.
In short: if building generational wealth is a long-term priority for you, buying a home before age 35 will help you reach your goal.
So, how can you reduce your risk if you’re a millennial looking to buy, but nervous about the economy?
1. Purchase within your means. Don’t get caught up in impressing your friends and becoming “house poor”. Buying a home is impressive within itself!
2. Focus on your local market strength. While the National Housing Market can give an idea of what’s to come, each local market is different. Check the stats of your local market for signs of strength.
3. Budget wisely. Consider the type of lifestyle you like to have before purchasing your home. What you can afford on paper doesn’t always align with where you’ll be financially comfortable. If you enjoy eating out a lot, have lots of hobbies, or travel often— those are all things you will want to include in your budget. Are you willing to give those activities up in order to have the home you want? If not, include saving for them in your budget before deciding on what home to purchase.
Buying a home is a great financial decision, no matter your age. The key is making sure that you go into a purchase with clarity. That’s why having expert mortgage professionals, like our loan officers here at Residential Mortgage Corp., is key. We not only walk you through the home loan process, but are committed to helping you make the choices that set you up for success. Contact us for a free consultation or to take the best first step of getting pre-qualified for your new home.