In 2020, millennials will be buying the bulk of real estate in the U.S., according to Realtor.com’s 2020 Housing Market Predictions. This could be due to the fact that they are currently the largest living adult generation in the United States. As a result, they have begun to reconsider its housing conditions. Most millennials buying their first home are learning about the world of loans, mortgages and interest rates. Millennials also bring to the real estate table considerations that generations before them have not faced in such depth, such as debts from student loans. This article provides characteristics for millennial home buying considerations.
It’s clear that buying a property is one of the biggest decisions the millennials are facing right now. If you are a millennial buying your first home, here are some tips to make that dream come true!
1. GET YOUR FINANCES IN ORDER
Student loans are one of the biggest challenges facing millennial homebuyers. According to Forbes, over 45 million Americans are paying off a national student loan that average $32,731 per graduate!
As if student loans weren’t enough, consumer debt has postponed the home-buying dream of many millennials. In fact, NAR reports that, second to student loans, the two expenses that delayed saving for a down payment were credit card debt (32%) and car loans (32%).
Consequently, before deciding to buy a house, millennials need to organize their finances first. Some ways to do that is by setting a priority to pay off the student loan. Once that is achieved, use the money you were using to pay off the loan to pay for the next largest debt you still might have. These could include credit card debt and/or car loans.
Therefore saving is the key to homeownership! This can be done in multiple ways by cutting down unnecessary costs. By sticking to a budget on expenses used for leisure, entertainment or eating out, you can start saving for that down payment. I understand how being in your 20’s or 30’s, it is hard to have a budget set for each aspect of your monthly expenditures. However, it is a small sacrifice to pay if your ultimate goal is to buy a property.
2. FIND A TRUSTWORTHY REAL ESTATE AGENT
Negotiating and knowing the real estate market is not easy. This is why it is highly advisable to find a local real estate agent that knows about the city and area you are looking into purchasing a property.
This is the person who will be in charge of helping you make one of the most important decisions of your lives. Look for those who transmit you trust, security, and extensive knowledge in real estate. Furthermore, those who understand your needs and go the extra mile to help you get your dream home throughout the process. Last but not least, when buying or selling a house, you want a real estate agent who negotiates the best deal and treats you as their most important client.
If you want to have a chat with me about your real estate needs, please email me at naomi@RealtyAustin.com or contact me here.
3. DETERMINE YOUR ESSENTIAL NEEDS
Buyers in their early 30’s tend to be more established in life. I encourage these buyers to share with me what for them are “must haves” for their future home. We reference this list often throughout the buying process and will even sometimes make changes after we have seen a few houses.
Knowing what you are looking for in a house is imperative, especially if you and your partner have different wants or needs. This will also give you and your partner peace of mind. You know that you have found the “perfect” house when you feel the house checks off all the important boxes on your wishlist.
4. DO NOT SETTLE
When buying a new home, it is very easy to think the first house you look at may be “the perfect one”, or at least the one that “meets all your needs”. Hence, it’s important to trust your instincts and not be a conformist.
Pay attention to all the details of the property you’re considering to purchase. Unless you have found the property you feel in your gut happy with, it is best to look for more properties. The reason being that you can compare them and choose the right one for you considering your price range.
I found that most of my clients spend a period of time looking at houses online and physically before they feel very comfortable with their choice.
5. THINK BEYOND NOW, THINK LONG-TERM
A hip condo downtown may appear to be an extraordinary spot to set up your first permanent residence. However, consider how that investment will look like in a few years. Where will your profession and career take you? What appreciation does the area have?
On the off chance that a single-family home is too overwhelming, think about an attached duplex or townhouse with a smaller parcel size. By doing so, you could have a more extensive amount of purchasers later on and the equity gain will often surpass that of a high-rise building.
I help clients think through different scenarios and determine their goals longterm. Are they looking for a house that provides them with a high quality of life? Are they most interested in a high rate of return for their investment? With their short and longterm goals in mind, we can go find the home that will make them happy for years to come.