Zillow recently reported that affordability is holding back too many potential Millennial home buyers. The Twin Cities Millennial Home Buying Report by Home Destination, a RE/MAX Results Realtor serving the Twin Cities, comments on the possible reasons why some Millennials hold back from buying a home.
February 2, 2015 (Newswire.com) - Affordability is causing doubt among some young adults, if indications in Zillow's January 19th article are correct. Millennial home buyer activity levels in the Twin Cities rise above such sluggishness due to being the second-largest market in the nation among home-owning Millennials. The doubt may work favorably as a caution to first-time homebuyers to keep to home purchases they can afford.
"For many Millennials living in the Twin Cities, it isn't they don't want to buy a home in their life time, but rather that they are cautious about adding another monthly obligation," says Jenna Thuening, owner of Home Destination.
The year ahead for the real estate industry is heavily dependent on decisions that the Millennial generation will make. As the young generation determines whether or not it is better to rent longer or buy a home, home sellers wait on the sidelines. "High home values may also be making some young adults very pessimistic about their ability to buy a home in the future," according to the article titled Millennials Sidelined in More Expensive Housing Markets.
Many Millennials seeking affordable homes to purchase in the Twin Cities find them. Home Destination reports on the possible reasons why other Millennials may be holding back from buying a home:
1. Millennials are Paying off Education Debt Before Buying
Never before has a generation been burdened with such staggering amounts of student loan debt. A dose of reality is delaying some Millennial loan applications if they have determined that adding mortgage debt to a student loan would simply be too much.
2. Memories of the Housing Crash Create Caution
Wide-eyed as children, some of today's prospective millennial homebuyers can readily recall their parents struggles during housing's down turn. When home values dipped unexpectedly, would-be move-up home buyers had to reconsider. Millennials, who saw their parent feel stuck trying to sell during the housing market down turn, may opt to rent longer as a sense of safety until the market recovery is sustained longer.
3. Fluctuations in Millennial Housing Preferences
Today's Millennial generation has witnessed more real estate fluctuation that their parents did when attempting to buy their first home. Add that to how many are freelancing or working long hours from a home office and one can see how being more nomadic has come about. When project work can be accomplished in one location one month and in another state the next, they may not see why they should settle down and buy a home just yet.
4. Delaying Marriage and Raising a Family
Many factors may be behind why Millennials are choosing to marry later in life, including the age they plan to have children - if at all. Individuals who belong in the Gen X age bracket, considered one another as "old" if they waited for a marriage commitment till age 22. Today the same age is considered "young" to be getting married. Lifestyle changes, like starting a family or moving up out of a starter job, are regarded as a good time to buy.
5. Waiting for Sustained Stability in the Twin Cities Real Estate Market
The recent plunge in home values may also be a contributing factor why some young adults are doubtful they will be able to afford that home after settling into it. "Home values explain a large portion of the cross-metro differences in the shares of young adult renters who say they never plan to buy a home," says Zillow in the Millennials Sidelined in More Expensive Housing Markets January 19th article.
Meeting with a real estate agent helps Millennial buyers glean what steps are involved when buying a home. By reviewing a comprehensive Twin Cities market analysis on locations being considered for buying, Millennials, as well as all generations interested in home buying, can be informed how the market works. Doubts are eased when a prospective home buyers are well-informed before making housing decisions.
About Home Destination - Twin Cities Real Estate:
Home Destination offers a loyal and committed real estate professional service that personally handles all of the details of selling or purchasing homes in Eden Prairie, Minnesota. Helping all home buyer types, from individuals seeking to buy their first home to individuals purchasing investment properties, Jenna Thuening has the real estate experience and acumen buyers and sellers benefit from. Read the full report on Millennial homebuyer activity is stronger in affordable locations.