SIG | Buying Your First Home as a Millennial

Posted by Bryan Zupan on Thursday, June 21st, 2018 at 1:50pm.

 By: Pooja Doshi

    We live in a world where commitment is taboo. People are settling into their married lives even later in life. Parents are treating their sons and daughters’ pets as their grandchildren. So, when is the right time to buy a home? Research shows that millennials are buying homes before they even get married. Before they even own a pet. They are prioritizing furthering their education and delaying settling down, which is often a huge precursor to buying a home. Data shows that the homeownership rate among households headed by someone under the age 35 has increased the most of any age group in the fourth quarter of 2017, jumping from 34.7 percent, whereas a year earlier it was 36 percent.

 

    The top five cities that millennials are buying in are: 1) Birmingham, AL, 2) Virginia Beach, VA, 3) Pittsburgh, PA, 4) Buffalo, NY, and 5) Minneapolis, MN (Business Weekly, April 2018). Why are these markets prospering with millennials buying homes versus other major cities in the United States? Cheaper home prices are certainly a factor.

    What are the forces behind this strange affinity of owning a home in your late 20s to mid-30s? Falling unemployment rates and rising rent sure have led to this miracle, as some would say. The concept of renting vs. owning  thereby ceases to exist as rent prices have become the equivalent of a mortgage, even for entry level properties. But even if millennials wish to own property, there are still many hurdles. Saving up for a down payment, closing costs, and other miscellaneous fees  add up and soon you are left with an empty condo because you spent all your savings on just buying the property, so there are no funds left to furnish it. And as millennials, we all have this idea of how our home should look; when we host classy parties for our friends, when we want to stay in on a rainy day watching a movie and drinking tea; all thanks to Pinterest.

    So, is it financially smart to buy a property in your late 20s/ early 30s? Or is the better question, how long do you plan to commit to the location that you buy the property in? Back in the day when our parents were just entering the job market, you stuck with one job and kept it if you could. And nowadays, our resume shows three job changes within five years, sometimes even coast to coast. There isn’t a right answer because fortunately to growing generation changes even if you do decide to buy property in your 20s or 30s, you have the option to rent it out, or even Airbnb it.

    Whether you decide to buy a home in your 20s or in your 40s, the process is still the same, except that your parents may not help you out as much with the initial payment. Take the first-time home buyer courses, get a free pedicure or drink out of it, and get yourself the $1000 credit. Trust me, it goes a long way during the home buying process.

If you are interested in connecting with the Author Pooja Doshi, please email her at pdoshi@sigrealestateusa.com

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Do you need help to determine if renting or buying is right for you? Please contact SIG | Real Estate Services.

 

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