Many generations have always considered home purchase as a significant milestone. That is probably because it is the most expensive purchase that a person can get in his life. Despite this prevailing impression, millennials are having a hard time buying a home. While many people of this generation are happy and content with renting, some still dream of having a space that they can proudly say that they own. After all, it is an investment that can be utilized in many ways.
But what keeps millennials from buying a home? Several think tanks, financial institutions, and even property management companies have uncovered some of the most significant reasons. Here are some of them:
It’s more expensive than ever
Factor in the inflation rate, fluctuating economic conditions, and limited home supply, and you get excessively expensive real estate properties. And urban properties tend to be much more costly. With this status quo, it will be challenging for a millennial to afford a home. Other than the property itself, buyers will also have to cover a slew of fees, such as real estate agent’s fees, home insurance, closing costs, and even taxes. Add to that the fact that things, from food to transport to utilities, are much more expensive than ever that people find it hard to set aside money for a down payment. It all boils down to priorities.
Millennials deal with student debts
Many millennials are hesitant to enter the housing market because they are still struggling with another financial obligation: student debts. That is pervasive among university students who are still paying off their debts even after they graduate. Millennials find that a large portion of their salary goes to the payment of their debts, which sometimes takes years before they fully settle these. It is a major reason they delay buying a home.
They have not found a partner yet
Buying a home as an individual millennial may sound like an impossible mission. Though, some can do it, you have to acknowledge the fact that many do not have the same capacity. Some millennials do it differently; they are only able to buy a home when they have decided to get married. That way, down payment and mortgage payments will be split into two, making the property purchase less of a burden.
Credit standards have become strict
Credit requirements have also changed. They have become much stricter, which makes it hard for millennials to afford mortgages. For someone to get a good deal for a mortgage, they have to have a high credit score. However, many younger adults have less than average credit scores, knowing that a lot of them have to pay other debts, such as car and student loans.
Is it still possible?
The outlook for the millennial housing market seems to be bright. And yes, it is still possible for a millennial to own a home. The right housing market is one choice to look at; this means picking a less crowded location where properties are cheaper. Timing is also essential. They may consider looking out for new real estate developments, as pre-construction homes and condo units may have a more affordable price tag.