Millennials have had it rough since they came of age. The average millennial with a bachelor’s degree has $30,000 in student loan debt, the job market is extremely competitive and wages have been virtually stagnant since the late 2000’s. All of this makes buying a home a challenge, but millennials are beginning to enter the housing market at a rapid pace and disrupting the status quo along the way.
“First time buyers need established credit to buy a home without a co-signer and they need a direct hire job that they have been in for more than two years to prove they are qualified to afford the purchase. Contemporary Staffing Solutions prioritizes the recent college graduate who is driven to move their life in the direction of making large purchases that help them to be a better employee in the office. Work-Life balance brings a more productive employee! Cheers to your millennial staff that just bought their first home!” explains Sharon Tsao, EVP Sales & Marketing, Contemporary Staffing Solutions.
Why The Millennial Home Buyer Matters
Why all the focus on millennials’ preferences? Millennials make up 66% of new home buyers and over 65% plan to buy a new home within the next five years. Millennials are also extremely well-informed thanks to the research-based culture they grew up in. This is a generation that spends hours researching socks before they buy them online, so they spend even more time researching home buying. Millennials are more likely than other generations to painstakingly research their options in terms of housing inventory, comparable pricing, and mortgages than any other generation.
Millennials are also much more interested in the cost-per-month of a mortgage than the total cost of the house. This is likely because they already have student loans looming over them and because many struggled during The Great Recession. To them, managing monthly expenses today is more important than the price tag of their home.
An interesting dynamic that also makes the Millennial home buyer unique is parental involvement. Because millennials tend to have so much college debt, parents are frequently involved in providing some or all of the down payment and it is common for parents to be included on the mortgage of their adult children’s homes.
Millennials Aren’t Looking For Fixer-Uppers
A few decades ago, it was assumed that first-time home-buyers would generally be in the market for a house that probably needed a little bit of cosmetic work. Today, millennials are looking for homes that are move-in ready and fully updated. Considering their debt load and their focus on managing monthly costs, they don’t have much left over for new home renovation projects.
However, like generations before them, they consider their first home to be a starter home. Only 11% of millennial buyers consider a home to be a permanent purchase and 68% of first-time homebuyers view that house a stepping stone to the home they really want. While the average homeowner from other generations stays in a house for ten years, millennials only keep theirs for six.
Millennials are changing the real estate and mortgage market rapidly. They are taking matters into their own hands, rather than relying on realtors and mortgage brokers, they aren’t interested in fixer-uppers and their parents are actively involved in the process.
The right professionals can help attract first-time homebuyers into the market and make the process as smooth and successful as possible. If your company is looking for mortgage underwriting or finance talent, or if you are a mortgage professional seeking new opportunities, contact the expert recruiters at Contemporary Staffing Solutions today.