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Homeownership

Stereotypes be damned, millennials really want to own their own homes

As this demographic overcomes the obstacles in front of them, it appears they will have their eye on owning their own home. The age at which that happens may end up being a bit higher than usual.

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When people share their opinions on millennials, they tend to fixate on the distances between our values and actions and those of the previous generation. However, now we have a small piece of proof that we’re not so different when it comes to our residential aspirations.

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Numbers don’t lie

In the National Association of Realtors’ annual Housing Opportunities and Market Experience (HOME) Survey, we can see that, contrary to some belief, millennials still feel positively about owning a house.

96 percent of surveyors under age 34 would want to buy a home in the future.

Eventually they move out of mom and dad’s

That’s a big deal, because 35 percent of homebuyers are millennial, and the number will only increase over time. According to a MarketWatch report, the millennial population bulges around age 24 and 25, only a year or two before the age where many millennials begin to marry.

That means that the “arrested development” generation is poised to reach a time where they move out of their parent’s basement and into their own place. The data from the report shows that too. According to those surveyed, 40 percent of non-homeowners don’t plan to buy before they marry, begin to have a family, or change jobs.

Though it might take a bit longer..

As you might expect, the other 57 percent of millennials who haven’t bought yet can’t afford to buy. Rising rent costs and student loan debt stagnate savings, making it harder to cobble together a down payment. Housing price increases across the board, but especially in cities that are hotbeds for job growth, certainly don’t help the matter.

In spite of all this, millennials still feel great about owning a home. As this demographic overcomes the obstacles in front of them, it appears they will have their eye on owning their own home. The age at which that happens may end up being a bit higher than usual.

The American dream

You can see more of that positive attitude in the reasons why millennials want to own. According to the HOME survey, 85 percent believe buying a home is a good deal, and 88 percent believe that homeownership is part of their American dream.

That disparity is curious, no? It seems to indicate how much social and emotional weight people still put into houses. When you break this sentiment out by region, you see even greater disparities. In the South, 91 percent view homeownership as a part of their American dream, while only 85 percent say it is a good financial decision.

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Regional differences

It’s not surprising to see that in the Northeast, where real estate prices run high, only 84 percent of those surveyed thought owning a home is financially prudent. However, in the West, where home prices are currently skyrocketing, we see the highest percentage of millennials who see homeownership as a prudent financial decision. While the startup cost may be high, buyers can be almost certain of a return on investment. This attitude is bolstered by the cultural glamorization of the house-flipping business. Now, more than ever, millennials have reason to see a home as a piece of a retirement or investment strategy.

#MillennialHomebuyers

Born in Boston and raised in California, Connor arrived in Texas for college and was (lovingly) ensnared by southern hospitality and copious helpings of queso. As an SEO professional, he lives and breathes online marketing and its impact on businesses. His loves include disc-related sports, a pint of a top-notch craft beer, historical non-fiction novels, and Austin's live music scene.

Homeownership

How buyers are competing in a tight housing market

(HOMEOWNERSHIP) It’s a seller’s market with housing supply at an all-time low. Here’s what buyers are doing to increase their chances of buying a home.

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family in their living room with moving boxes during the competitive housing market

Home inventory is at an all-time low in most places around the country. Most people believe that the COVID-19 pandemic is responsible. Families are staying put in their homes, rather than looking for a new place to live. Sellers and realtors are winning in this highly competitive market, making us wonder how buyers are faring.

Cash is king

According to the NAR, cash sales are up by an average of 21%. Buyers are hoping that cash makes their offer more attractive. Closing without a loan has a lot of benefits to the seller. The sale is more likely to close, as it isn’t dependent on a loan. Plus, there are fewer costs involved in the closing. Since 2013, cash sales haven’t been trending upward, so this is an interesting turn for sellers. Buyers who make cash offers reduce the risk of getting rejected by the seller.

Buyers making larger down payments

Sellers also benefit when buyers make a 20% down payment or more. A higher down payment increases the chance of getting a loan. According to the NAR, almost 50% of buyers are making a down payment of at least 20%, which is up from 40% of buyers in 2011. Buyers avoid mortgage insurance premiums, which makes it a win-win for everyone.

Buyers aren’t even offering or negotiating

The third way buyers are coping in this market is to back off and not even make an offer when they know a home already has competition. Why get your hopes up, only to have them dashed when you can’t negotiate?

Will supply return?

The good news is that the housing supply outlook is on the increase. As vaccinations roll out and people feel safer to show their home, more homes should come on the market. Housing permits are up, too. This should help even out the market and give buyers a better chance to find a home.

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Homeownership

Bank of America helps income-restricted homebuyers with $5B program

(HOMEOWNERSHIP) Bank of America is offering assistance to low to moderate-income homebuyers by reducing their mortgage and upfront home-buying costs.

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Front of Bank of America location

The Bank of America announced that it is expanding its affordable homeownership initiative to help low to moderate-income homebuyers find their dream home. The Bank of America Community Homeownership Commitment® started in 2019 with $5 billion.

According to the press release, the program has already helped almost 21,000 individuals and families purchase homes by helping with down payments and closing costs through grants. When combined with other programs designed to help first-time homebuyers, the upfront costs of owning a home are significantly reduced. This information is beneficial for Realtors working with first-time or low to moderate-income homebuyers and can help provide more options for this clientele.

Bank of America’s grant programs

Bank of America features two grant programs to help homebuyers. Grants do not require repayment, giving homebuyers with lower incomes a foot in the door.

Down Payment grants – eligible homebuyers can receive 3% of the home’s purchase price up to $10,000 (whichever is less) toward the purchase of their home.
America’s Home Grant® program – credit towards closing costs of up to $7500 or to buy down the interest rate.

According to Bank of America, these two grant programs can be used together. The average homebuyer receives about $14,000 toward their home purchase, but some can receive up to $17,500 towards their dream home.

Homeownership is the American dream

Maya Angelou said, “The ache for home lives in all of us, the safe place where we can go as we are and not be questioned.” Homeownership doesn’t just benefit families, it benefits communities. Bank of America isn’t the first financial institution to offer programs to help homebuyers with down payments and closing costs.

The housing market might be competitive right now, but homebuyers can still find houses where they can set down roots. It pays to look around for options to help low- to moderate-income shoppers find resources that assist them in reducing their mortgage and homebuying costs.

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Homeownership

Supply chain shortages Realtors need to know about to help their clientele

(HOMEOWNERSHIP) The supply chain shortage hasn’t just affected cars, computer chips, and medical equipment – what home goods are scarce and for how long?

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Down one aisle of a large warehouse.

Most experts are predicting that supply chain shortages won’t end anytime soon. What started with a rush on toilet paper at the beginning of the pandemic has become a supply chain nightmare across multiple industries, including homes themselves, new cars, computer chips, and medical equipment. While there are many reasons the supply chain has been disrupted, the fact remains that it has been pushed to the brink and homeowners may be impacted as they purchase a house or invest in remodeling to sell their home. This is also important information for Realtors to have a grasp on in order to better help their clientele during the home buying process. Without an end in sight, here are some goods that might be scarce next year:

Paint

CNN Business reported in September that the demand for paint is strong, but the industry has seen raw material cost increases. Between Hurricane Ida and the winter cold snap in Texas earlier this year, suppliers have not recovered to their pre-storm operating levels. One solution is to buy leftover paint or use wallpaper to update a room.

Appliances

According to Consumer Reports, the wait for some appliances is 4-8 weeks, with luxury appliances taking up to 4 months. Homeowners may need to compromise on the model they really want or buy a used model. If repairs can make the appliance run for a few more months, order a new one and hope for the best.

Furniture

Large ticket items have been impacted by shipping delays from Asia – Furniture is on that list. Homeowners may want to order furniture now for redesigning in 2022. Another alternative? Buy previously owned pieces or talk to local artisans who reupholster and repair furniture.

Bottled Water

It’s not the water that’s in shortage, it’s the plastic products used to bottle the water that is causing the supply chain to be disrupted. This could be a good thing for the environment. Suggest homeowners turn to water filtration systems, from an in-home installation to a pitcher you put in the fridge.

Power Tools

The freight industry is experiencing multiple issues, which is adding to the supply chain problems in the US. Power tools may be in short supply over the next few months. Fortunately, there’s an easy solution. Borrow from a neighbor, just make sure to return it quickly. Rent tools from your local big-box hardware store.

Don’t let the supply chain disruption put home projects on hold. Revamp your ideas. Compromise on materials, maybe a different pattern or color than planned. Or find creative solutions to keep moving forward.

Large cargo ship with many multi-colored bins representing the supply chain.

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