Millennials are the “it” demographic these days. Everyone is talking about them, now that they’re entering their 30’s and they’ve overtaken the Baby Boomers in numbers. Though the term “millennial” was coined nearly a quarter century ago to define the generation born after Gen X, it wasn’t used much until pretty recently. Now, the word is associated with tech savvy multi-tasking young adults with short attention spans. Just hearing it mentioned conjures up images of smart phones, selfies and social media posts.
As millennials enter young adulthood, they’re making a major impact on the economy. They have plenty of debt, like enormous student loans. And although many people use the term millennial as a pejorative term to describe someone who is young, lazy and entitled, they’re a generation who entered the job market at the end of a recession, so they understand what it’s like to face fierce competition.
Millennials are also facing pretty stiff competition in the housing market. Those who don’t want to pay today’s extremely high rents are taking a unique approach to home buying. According to Lucy Mueller for Forbes, sentimentality is less of a factor when it comes to millennials buying homes. First, they don’t see buying a home as the next step after marriage; many of them are opting to buy a house instead of plan a large wedding. Second, they’re in it for the short term. Their first home isn’t necessarily the one they’re going to settle down in and raise a family. It’s more like their first investment home that they’re going to make improvements to and then sell for a profit in a couple years, so they can upgrade.
Because they are going for what are considered investment properties – homes in up and coming urban neighborhoods that need a little work – they’re in competition with flippers, who buy homes, improve them and turn them for a profit professionally. These professional flippers are not first-timers, and, as Mueller points out, they’re coming to the table with cash. No matter how good your credit is, or whether you’re pre-approved or not, it’s hard to beat a cash offer.
Despite these challenges, some millennials are jumping right in, and they’re finding that a lot of lending institutions have programs for first-time home buyers that require smaller down payments. Not to mention, some of the stricter requirements that took hold after the housing bubble burst are starting to loosen again.
Check out what options are available to first-time home buyers at lonestarfinancing.com.