Let’s face it: Millennials are not buying homes.
The largest generation in US history is about to transition into their prime spending years, but 93% are choosing to rent instead of buy. It’s not like we can blame them, with Millennials facing lower employment levels, smaller incomes, and astronomical student debt, the prospect of renting seems to make more sense.
In recent years, we have seen a surge in young people choosing to rent — around 60% in 2013, compared to 52% in 2005. There are perks of renting, such as free amenities and perks, convenience of maintenance and repairs, and the overall freedom of living where you want and moving whenever you wish. However, even with all of the benefits of renting, it is found that Millennials are paying almost one-third of their monthly income on rent.
But, is renting really the cheaper option?
Studies have shown that homeowners with an average income living in a typical home spend around 15.3% of their income on their monthly mortgage payment. This aligns with what many renter’s spent monthly on rent. And with rent steadily increasing across the country, many Millennials could start to view spending this percentage of their income as a deal.
Stan Humphries, Chief Economist from Zillow, agrees.
“Buying conditions are getting better everyday, and in time the all of fixed housing payments and building wealth through home equity will draw more buyers out of rentals and into home ownership,” says Humphries.
This predicament has left many wondering what we can do to help Millennials buy homes. We can’t front them a down payment, but we can provide them knowledge they need to be successful in their pursuit of home ownership.
With resources, such as the experienced agents from Fonville Morisey Realty and seasoned Loan Officers from FM Lending, we can provide this generation with the tools and information they need in order to set themselves up for success to buy homes in the next few years.
What advice would you give Millennials looking to purchase their first home? Share your advice in the comments below!
About FM Lending
FM Lending Services is a full service mortgage banker specializing in residential purchase and refinance loans in North Carolina since 1992. FM Lending Services offers a wide range of mortgage products and is consistently awarded the highest rankings by the North Carolina Housing Finance Agency and USDA. We have built a strong reputation in the Carolina’s for service, on time closings and professionalism. We pride ourselves on serving the lending needs of real estate professionals and their clients and many of our originators consistently rank in the TOP 1% of Mortgage Originators in the country*. It’s our mission to create an extraordinary customer experience through the efforts of our knowledgeable and caring mortgage professionals where relationships are valued and the focus is on treating every client with white glove service. We’ll work closely with you throughout the financing process, helping provide valuable information so you can make informed decisions.
FM Lending Services (Prosperity Home Mortgage, LLC dba FM Lending Services), *Ranked by Loan Originator Magazine