Wednesday, July 27, 2016

Millennials vs. Home ownership
    Why is it that the largest and best educated generation in American history makes up the smallest buying segment of the real estate market? The obvious answer is the increase in student debt, but is there more to it? 
      Developers and local builders seem to be looking past the millenials all together. Most new construction, especially in the Lehigh Valley, seems to be catering to the aging baby boomers. There has been an increase in 55+ communities as well as the $400,000+ new construction homes. Both of which do not fit the needs of the millennial buyers who are able and willing to buy. 
    Surveys by the National Association of Home Builders show that less than 20% of new construction in recent years has been for entry-level properties. Before the recession, that share typically hovered around 30%. More than half of single-family houses sold in recent years have been 2400 sq ft or larger, compared with about 40% a decade ago.
 With limited options, millennials have turned to renting instead of home ownership. The problem is rental values have increased faster than any time before. In just the past 12-months rents have increased just over 2% nationwide. First-time home buyers could purchase a 3 bedroom home with roughly 1500 sq ft. for a lower monthly mortgage payment than current rents on a 2 bedroom apartment. So why aren't more millennials purchasing homes?
     There is a lack of information on mortgage rates, home affordability, and how much down payment money is needed to buy a home. With the help of sellers assisting in buyers closing costs (which occurs in a majority of home sales) and mortgage programs that allow as little as 3.5% (in some cases even 0% down payments) buyers can get into a home for a few dollars more than most security deposits required to rent.
     Instead of paying your landlord's mortgage payment, start build equity for yourself. If you would like more information on the different options available for first-time home buyers please message me directly.

Chris Lawlor
Coldwell Banker Heritage
Cell: 484-560-3226
clawlor31@gmail.com