Who is a millennial buyer?
* Usually people born after 1980 up to 2000.
* Make up 25% of the United States population.
* Larger than the Baby Boomer generation and 20% larger than Generation X (1965 to 1980).
* 79% were first time buyers
* The median income is $66,200
* 77% are couples.
* 50% want to own a home of their own.
According to The Urban Land Institutes Emerging Trends in Real Estate for 2014 there are approximately 121 million households in the United States.
The projected growth over the next three years is going to be 3.7 percent. That’s almost4.5 million new households going to be formed.
This may be people moving out of their parents home, people getting married, having kids, buying a house or renting an apartment.
People getting out of college and getting a good job and forming their own household. On average that’s about 1.5 million a year.
This is a huge demographic of potential homeowners who are wanting to buy. It is up to us to show them the pros, cons, why and how.
When asked the question of where rents are going, Christopher Herbert, the research director at the Joint Center of Housing Studies at Harvard University said.
“Well I think it’s a basic question of supply and demand. When you have that many more renters coming into the market looking for housing and supply of housing isn’t responding as quickly as it might, that’s going to push rents up even if incomes are low.”
Meaning he thinks rent will go up. This makes for a very strong case for home ownership.
Shaun Donovan, the Secretary of Housing and Urban Development in the United States said,
“We are in the midst of the worst rental affordability crisis that this country has ever known.”
Let’s make sure to inform current or potential renters the benefits of buying today and in the near future.
Go over the pros and cons. If they don’t qualify, make sure they are on a plan to qualify in the near future.
Your loan officer will be able to help you with this. I know I put at least one person on a plan of action for home ownership at least once per week.
According the the Federal Reserve a homeowners net worth is over 30 times greater than a renters.
Now, we know this is not true for everyone. However according to the Federal Reserve numbers, on average it is.
When renting we are obviously building the owners net worth, why not build it for yourself?
There are so many benefits of home ownership, but below are 5 chosen by the Joint Center for Housing Studies at Harvard University.
This is a great chart to share on your social media pages and with potential clients.
Long story short, Millennials are the largest part of our population and they are ready to buy.
Don’t have 20% down? No problem, there are many low down payment options to choose from. Just depends on what you qualify for and what fits your needs.FHA:Maximum loan to value: 96.50%Down payment 3.50% (can be gifted)Seller can pay closing costs VA:Maximum loan to value: 100% up to maximum county loan limitDown payment $0Seller can pay closing costsNo mortgage insurance USDA:Maximum loan to value: 100%Down payment $0Seller can pay closing costsCan finance up to 102% of appraised value to include closing costs Conventional:Maximum loan to value: 95%Down payment 5.0%Seller can pay closing costs
Local State Programs: A few in Colorado for example:CHFA Advantage:Maximum loan to value: 97% Down payment 3%No mortgage insurance CHFA SmartStep: Maximum loan to value: Total of 96.50% between the 1st and 2nd CHFA loan Down payment: $1,000 – CHFA provides a 2nd mortgage for the difference that has to be paid back. Seller can pay closing costs Metro Mortgage Assistance Plus:Maximum loan to value: 96.50%Down payment is paid by the 4% Grant given by MMA and it never has to be paid back.Seller can pay closing costs All loan programs have requirements to qualify and can change at anytime. Always speak to a loan officer, get pre-qualified and review your options. Want some additional marketing ideas to help your business grow? Contact me and we schedule some one on one time together. Sean YoungSenior Mortgage AdvisorFirstCal ColoradoNMLS: firstname.lastname@example.org