Milliannials' Obstacles to Purchase a Home

Milliannials' Obstacles to Purchase a Home

 

Here is a simple chart prepared by C.A.R. (California Association of Realtors) with data supplied by NAR.

 

Millennials Obstacles to Buying a Home

As the chart shows there are quite a few reasons that Millennials do not run out and buy homes right out of school. Many have lived on credit cards and student loans during the college years and now they need to find a good paying job and pay down the credit cards and start paying off those nagging student loans.

Credit Scores can be a problem due to late payments or sometimes there is no credit at all if parents have supplemented the student loans and now the lending company says "You do not have any credit history so come back next year".

Right out of college and perhaps the first job is not the best paying as it takes a few years to get to a comfortable level of income. 

Millennials are comfortable living in dorms or parent's homes so most do not want or cannot deal with a total fixer so they end up renting a nice apartment instead.

Saving the down payment is always a problem for ALL buyers these days. With debt and starting pay many times there is not a whole lot of $$ to save in the bank. The younger kids prefer to have a nice apartment, go out to eat frequently and put off buying for a few years. Oh yes and let's not forget buying a new car too as this is one of the first purchases a graduates makes after getting a paycheck.

Options: Many times parents will help kids to get into a house and then they are comfortable paying the monthly expenses and mortgage payment, taxes and insurance.

Other Options- Many "First Time Home Buyer" programs to assist with the closing costs and down payment but keep in mind the credit must be good here so no "late or missed" payments or even foreclosed cars.

PLAN- Get on a budget and start saving money. Talk with a Realtor and Lender and make a plan going forward to save for that new home. 

Remember- Buying a home is the American Way!

 

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Comment balloon 6 commentsKristin Hamilton CA Realtor • April 29 2016 03:52PM

Comments

I continue to understand that student loan has really hindered many millennials from jump starting life with a new home.  I am hopeful, there will be some remedy for some of that in the future!  Perhaps a program that allows refinancing of student loan to a lower interest rate would help!

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 2 years ago

Thanks for sharing the chart Kristin Hamilton CA Realtor , I am surprised at the credit card debt for that age group.

Posted by Bob "RealMan" Timm, Bob Timm, Project Coordinator for Tivoli Homes (Tivoli Custom Homes) over 2 years ago

Great start but there are many more reasons, such as not having the right motivation, attitude etc. to home ownership as well as work...but what do I know, Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) over 2 years ago

Hi Myrl Jeffcoat 

Those darn student loans are such a problem but hopefully the lenders will see through it in the future especially if the income is high and perhaps loans are paid down somewhat.

Posted by Kristin Hamilton CA Realtor, (909) 557-6966- Specialize 55+ Communties Banning (Sun Lakes Realt) over 2 years ago

Hi Bob "RealMan" Timm 

Unfortunatley kids learn from adults and probably most parents use credit cards  religiously and credit card companies give them out without any credit to speak of so this gets them into trouble.

Posted by Kristin Hamilton CA Realtor, (909) 557-6966- Specialize 55+ Communties Banning (Sun Lakes Realt) over 2 years ago

Hi Endre Barath, Jr. 

I think the generations of the 40's, 50's and 60's had struggled through wars and knew how to save. Since we have all tried to give our kids as much as possible so they are not good at saving unless it was their allowance from us. 

Posted by Kristin Hamilton CA Realtor, (909) 557-6966- Specialize 55+ Communties Banning (Sun Lakes Realt) over 2 years ago

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