Rochester Hills Lender Says Young First Time Buyers Are Ready to Get in the Market
Believe it or not, 2019 will soon be coming to an end, and many real estate experts will be making predictions for 2020. A recent study from TransUnion may provide some insight into what we can expect from first-time buyers over the next few years.
According to this study, at least 8.3 million first-time homebuyers will enter the mortgage market between 2020 and 2022. Factor in significant economic growth and that number could potentially increase to 9.2 million. This study indicates that the number of first-time buyers are increasing, considering 7.6 million first time buyers entered the market between 2016 and 2018.
“While we’ve recently seen a boom in refi activity, actual homeownership rates are down. Challenges have included high home prices, sluggish wage growth and limited housing inventory,” said Joe Mellman, senior vice president and mortgage business leader at TransUnion. “But we may be starting to see daylight as slowing home price appreciation, low unemployment, increased wage growth and low interest rates are helping affordability.”
The survey also revealed that first-time buyers are getting younger. In fact, they are younger today than during the Great Recession, averaging at 36 years of age in 2018.
So what is motivating this younger generation to get into the real estate market? Here is what the TransUnion survey revealed.
- A desire for more privacy (45%)
- Create equity and improve financial picture (44%)
- Marriage (24%)
- Expanding their family (23%)
Another report from The National Association of Home Builders revealed 20 percent of millennials are planning on buying a home in the next year. Out of that group of millennial buyers, 75 percent of them are first-time buyers.
Read More: Oakland County Mortgage Lender Says Optimism is Growing Among Young, First-Time Homebuyers
Despite the optimism among Gen Z and Millennial buyers, there still is a lot of confusion about the mortgage process. Plenty of myths need to be dispelled, such as needing a 10-20% down payment. Today, even a conventional loan only requires 3% for first time buyers There are down payment assistance programs available and even zero down loans.
However, more than a third of the TransUnion survey respondents were not aware of different mortgage options, and 41% of respondents believe a high down payment is required.
If consumers eventually become more aware of the loan programs available, hopefully the number of first-time buyers will continue to increase, allowing more renters to pursue their dream of homeownership.
Contact Rochester Hills Mortgage Lender, Julie Krumholz
Buying a home for the first time in Rochester Hills, Michigan? You will want an experienced mortgage lender to help you navigate through every step of the process.
Julie Krumholz has over 30 years experience in the mortgage industry. She has worked in underwriting, quality control, processing, closing and loan origination. Her comprehensive background allows her to advise clients with unusual expertise.
