One of the common misconception about buying a new home has to fall under the myth of ever so scary down payment. It's not uncommon for people to say the 15%-20% is what the market demands to buy a home, which is true back then. The real estate market is an ever-changing environment, much of what we know before are either obsolete or holds little truth with our current market today.
Now that the largest generation since baby boomers has aged into prime homebuying age, there will no doubt be an uptick in the national homeownership rate.
The study from Urban Institute revealed that nearly a quarter of this generation has the credit and income needed to purchase a home. Surprisingly, the largest share of mortgage-ready millennials lives in expensive coastal cities.
These cities often attract highly skilled workers who demand higher salaries for their expertise.
So, what's holding these mortgage-ready millennials back from buying?
Myths About Down Payment Requirements!
Most of the millennials surveyed for the study believe that they need at least a 15% down payment in order to buy a home when, in reality, the median down payment in the US in 2017 was just 5%, and many programs are available for even lower down payments!
The study goes on to point out that:
"Despite limited awareness, every state has programs that provide grants and loans to make homeownership more attainable, with average assistance in various states ranging from $2,436 to $21,171."
With so many young families now able to buy a home in today's market, the demand for housing will continue for years to come.
If you are one of the many millennials who have questions about their ability to buy in today's market, sit with a local real estate professional who can assist you along your journey!