As millennials begin to hit their peak, they are moving to the suburbs at a faster rate than their parents did in the 90s. A report from NAR reveals that a large portion of the millennial generation would like to own homes in the suburbs. Cities have reached their “peak Millennial,” the largest presence of this young generation living in urban areas. As USC urban planning professional Dowell Myers comments, it’s only down from here.
Now is a better time than ever for this generation to dip their toes in the home buying market. While city rents are at their highest, mortgage rates are at their lowest. According to Trulia, buying a house is now 23% cheaper than renting nationwide. It does depend on the city, but for Houston, New Orleans, and Miami, buying is over 40% cheaper than renting. Competition for single family starter homes is starting to heat up, so now is good time to get in on the market before your neighbors.
Buying a home means getting a mortgage. Ellie Mae’s new Millennial Tracker reported that 37% of Millennial buyers received Federal Housing Administration (FHA) loans. FHA is attractive to young first-time home buyers because it cuts some slack for those with limited income.
The barriers millennials experience for getting a mortgage are student loan debt and credit scores, but there are numerous ways around these problems. Refinancing your student loan debt at a lower rate can lower your monthly payments or shorten the term of your loan. Paying a little less on loans each month can shorten the time it takes you to save for a down payment. While you’re saving money, you can work on improving your credit score. While FHA loans are forgiving towards low credit scores, a higher credit score can ultimately lead to lower mortgage payments.
Are you ready to dive into the home buying market? Contact a mortgage advisor today via live chat or at 1-844-778-5626 if you have any questions. We will match you to your perfect home loan.