It’s happening: Millennials are finally entering the housing market -- and expected to make a significant impact.
It has been projected that millennials are anticipated to purchase close to 10 million homes between 2019 and 2029. With the 2019 Federal Reserve rate cuts and 2020 being an election year, rates are expected to hold steady. This will be the “pull factor” that opens doors for even more millennials, as the market is in a very welcoming position for first-time homebuyers.
Anyone who has been considering making the plunge and buying that first home should take advantage of the favorable housing market conditions and get pre-approved today, the experts advise.
While most millennials entered adulthood years ago, there has been a delay in some of them joining the homeownership market up until recently, due to a variety of factors.
“Only 32% of millennials owned a home in 2015, according to the Urban Institute," said Maryalene LaPonsie in a report from US News.
Millennials have historically been priced out of the housing market due to housing affordability, looming student loan debt, and a high cost of living and lifestyle. Additionally, a common misconception among millennials has been the perceived amount of money needed for a down payment.
According to The Mortgage Reports, “49% of millennials believe they need a 20% down payment to buy a home. Another 43% think they’ll pay private mortgage insurance if they don’t.”
Little to no cash savings and a gap in knowledge on down payments have been major contributing factors to the delay.
However, this won’t serve as an interruption for millennials entering the housing market any longer.
One driving push for millennials is simply that they want to be homeowners. Millennials are expected to be the “largest single cohort of homebuyers in 2020."
Currently, homeownership in millennials is ranked extremely high on their priority list.
Close to 72% say owning a home is one of their “most important life goals.”
According to The Mortgage Report, “Homeownership ranked higher than getting married (which only 50% of millennials said was a life goal), having children (44%) and traveling the world (61%).”
For anyone with a strong desire to become a homeowner, the time is now. Low rates in conjunction with the average household income increasing, make an excellent environment for potential homebuyers and homeowners alike.
Homeowners can take advantage of these low rates by refinancing to consolidate debt, lower monthly mortgage payments, eliminate PMI or take cash out. Experts can provide a free, five-minute mortgage review to determine how you could possibly save.
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- The Mortgage Reports, Strong homebuying season is on the horizon, April 2019
- The Mortgage Reports, For Millennials, homeownership is more important than marriage, kids, October 2018
- The Washington Post, Experts predict what the 2020 housing market will bring, January 2020
- CNBC, Recent homebuyer numbers show spending is just the beginning for millennials, December 2019
- Housing Wire, Millennials will purchase at least 10 million new homes in the next 10 years, December 2018