With the housing crisis still fresh in their minds, some millennials struggle to see a pathway to home ownership. While 91 percent of millennials report intentions to buy one day, getting there without a plan can be challenging.
Homeownership in the US recently hit an all-time low, and the lack of millennial buyers is seen as one of the reasons for the dip.
Why Are Millennials Likely to Wait to Buy a Home?
Aftereffects of the Great Recession
- Lenders became more stringent about who qualifies for a mortgage. As a result, one in three millennials does not meet credit standards to get a mortgage.
- Homeowners who lost equity during the Great Recession stayed put, creating a shortage of homes on the market.
Other Financial Obligations
- The average college graduate in 2016 had $37,173 in student debt.
- In 2015, the living wage in the United States was $15.12 per hour, but minimum wage in most states is below this, making it hard to save for a down payment.
- Childcare expenses total 20 percent of the average family’s budget, more than transportation (19 percent), food (17 percent) and health (11 percent).
Lack of Awareness
- 73 percent of millennials don’t know about low down payment options for home buyers.
- Many programs exist to help with purchasing a home:
- US Department of Housing and Urban Development (HUD) Grants
- State Housing Finance Agency Lending Programs
- Federal Housing Administration First Time Homebuyer Programs
- Energy Efficient Mortgages
- USDA Mortgage Program
If you’re looking to buy your first home, Community First Credit Union can help. Our experts are here to offer advice on how to save money, build credit and get approved to buy the home of your dreams.