Fewer Millennials purchased homes last year than in the past. In 2011, buyers aged 25 to 34 comprised 27 percent of the market, the lowest point in the past decade, according to the National Association of Realtors. Several factors may have contributed to the slump. A Move Inc. survey of 1,000 American adults, both young and old, reveals these clues:
- About 27 percent of all respondents said they are concerned about the real estate market, home values, the economy, jobs, and their ability to save for a down payment.
- About 35 percent of respondents said they are unable to get credit or find affordable credit.
- Younger adults are choosier (80 percent self-identified as picky) about where they will live, because the home is both a financial investment and an extension of their identities.
- Younger adults are willing to put more money toward housing; about 40 percent surveyed say they might spend 30 to 60 percent of their gross monthly income in contrast to older Americans, who would spend less than 30 percent.
Some homebuilders are coaching first-time homebuyers toward success, reports NBC’s Economy Watch. Pulte and Lennar Corp, for example, are helping clients secure loans and navigate the buying process from start to finish. As a result of its efforts, Lennar Corp’s home sales revenue jumped by 33 percent last quarter from the same time a year ago. Consumer experts are concerned that some buyers, once they’ve secured a government-backed loan that requires zero down payment, will not be able to sustain their mortgage bills over the long-term.
Most lenders recommend that buyers put no more than 28 percent of annual gross wages on housing. That percentage should include mortgage principal, interest, taxes, and insurance. For more information, contact your local financial advisor or mortgage professional.