There are definitely polarizing reports out there about the impact of millennial home buyers and their place in the real estate market. The most common headline being, “millennials rent more than they buy” making them a liability for your business and promising leads.
It Just Takes a Little Longer
Home buying with a younger demographic has shifted for two reasons. First, millennials are simply taking longer to get married. When you don’t have a partner in life, buying a home at this point is definitely not as attractive. This does not mean they are never going to get married, start a family, and potentially buy a house. The optimism is still there, and building relationships with clients early on should be a top priority. Second, student loan debt is a growing problem in America. With lots of debt coming out of college, they chose to live at home or find cheaper living alternatives until they can get a handle on their debt before thinking about a mortgage.
I Heard Down Payments Are Costly!
This number is actually not as high as you probably think it is. Generally people will throw around the 20% number, but the numbers show that you generally can pay as little as 3% with a FHA loan. With student debt at an all time high, coming up with a down payment can be difficult. Just understand that you have options and don’t always believe common myths out there about home buying.
Learn more about your down payment costs here.
Today’s First-Time Home-buyers Older, More Often Single
Data from Zillow suggests that money is not always the primary reason for this shift in home buying. From the article, “The average first-time homebuyer is about 33, at the front end of the millennial generation. Their median income is $54,340, which is about the same as what first-time homebuyers made in the 1970s, when adjusted for inflation. In the late 1980s, 52 percent of first-time homebuyers were married. Today, only 40% were married.”
As millennial home buyers, this is news you want to hear! National real estate brands are dedicating millions of dollars into marketing homes that you will have interest in. Just look at what this company is doing with smart homes.
Rent Is Going Up
The cost of rent is on the rise, both on a national level and in Southern California. According to this RealtyTrac report, buying is still more affordable than renting in 58 percent of U.S. housing markets despite home price appreciation outpacing rent growth in 55 percent of markets. The report also shows that the rise in rents is outpacing weekly wage growth in 57 percent of markets.
The cost of renting in Southern California has been one rise. Reports show that during 2015, rent in LA County rose about 8 percent. However, data shows that its pretty favorable to buy in San Bernardino County. Every situation is different, and the question of renting or buying is a tough decision to make with your family. Its easy to get overwhelmed in the data websites try to push on you. Southern California is a tough market, LA and Orange County will push buyers out if they don’t have a good enough job. But there is affordable houses in Riverside and San Bernardino counties.
Moving To The Suburbs is “Hipster”
(wait is it hipster if we are talking about it?)
Time magazine published an article talking about the 25 suburbs where millennials are moving. Riverside (where our office is) was listed as the biggest % change for millennial home buyers. Stay tuned for our Riverside neighborhood guide coming soon for millennial home buyers in the Inland Empire.