The economy seems to be finally turning, and home loan interest rates are still historically low. Real estate values are starting to climb as well, all of which makes for a growing opportunity for new homeowners to get into the market before it gets too expensive again.
Millennials Don't Seem To Be On Board
They represent the next generation of homebuyers, but a number of barriers can seem to be smack in the way, discouraging many. Yet there are ways around these issues.
According to the Boston Globe, only 32 percent of Millennials are homeowners in 2014, either with a house or a condominium. A number of factors contribute to this situation, and the big issue is finding a viable career. The general unemployment rate for young people is at 16 percent nationwide, almost double the regular average for all ages combined.
Add in the fact that many have large student loans eating up what income is earned in loan payments, and that doesn't leave much for saving into a down payment or a mortgage payment. In fact, one out of three college graduates right now has moved back in with the parents.
The career-chase situation is not a new one. The previous bunch, Generation X, experienced the same thing in the early 1990s with just as high an unemployment rate. The big takeaway from their experience is that the dip and labor famine is temporary. Most Generation X folks now are well-employed and living in regular, affordable homes across the country.
Further, Some Very Helpful Tools Are Still Available For New Buyers:
- Any homebuyer with military status can take advantage of Veterans Administration loans with far better rates than the normal market, making mortgage payments cheaper.
- Those buying in rural areas can take advantage of rural homebuyer's assistance programs provided by the U.S. Department of Agriculture to help people move to small towns and similar communities.
- The Housing and Urban Development Agency provides HUD loans that make it very affordable for those with limited income to purchase HUD-owned homes as first-time buyers and get into real estate.
- And the current market still has plenty of quality used homes from prior foreclosures that are marked well below their real value to move these units in sales.
Of course, the big response from Millenials is how do I earn more to even get started. Like Generation X folks before them, Millenials can't wait for a job to be made available on a platter. While looking, many smart folks have started their own businesses on the Internet. If a current job is enough to cover current bills, a second income can be entirely dedicated to saving, which can generate thousands of dollars quickly. Even a part-time second job that creates $1,000 a month produces $12,000 a year and in two years enough for a sizable down payment.
Don't give up, but definitely try smarter.