Blog

Feb
12
Millennials: Benefits of Home Ownership at a Younger Age

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Recent studies have stated millennials are buying 8% fewer homes than their baby boomer parents and grandparents. The delay in homeownership for millennials could have long-term economic consequences. For most people, home equity is usually the largest single source of personal wealth.

A recent study titled, Millennials Could Be Foregoing Equity Wealth, compared the difference in housing wealth over three categories of homeowners. The results are as follows:

  • Homeowners who purchased their home between the ages of 25 and 34 had an average housing wealth of $150,000.
  • Homeowners who waited until age 35 to 44 to buy their home averaged $72,000 less.
  • Those who became first-time homebuyers at 45 or older had at least $100,000 less.

We then researched the reasons millennials aren’t buying homes and came across the research report by the Urban Institute titled, Millennial Homeownership: Why Is It So Low, and How Can We Increase It?.

This report listed the following reasons for the delay in homeownership:

  1. Delayed Marriage. - Being married increases the probability of homeownership by at least 18 percent.
  2. Increased Education Debt. - A 1 percent increase in education loan debt decreases the likelihood of owning a home by 0.15 percent.
  3. Increased Rents. - For the single millennial, it is much more challenging to pay a higher rent and still save money for a home.
  4. Delay in Marriage. Being single versus being married drastically reduces household income.
  5. Delayed Child Bearing. For married couples, a child increases homeownership by 6.2 percent.

So the question remains, how can we change the statistics? How can we help millennials become homeowners and increase their housing wealth at a younger age?

The same report then discusses policies and ideas which they feel could increase millennials’ access to homeownership and address the concerns they face:

  1. Educate young adults on the financial benefits of homeownership. This education could start as early as high school and include information about downpayment assistance programs, mortgages, credit scores, etc.
  2. Provide downpayment assistance programs.
  3. Use technology to simplify the mortgage process.
  4. Expand credit assessment criteria.
  5. Change land-use and zoning regulations to allow for more affordable housing, especially in highly populated, metropolitan areas.

We believe everyone should have the opportunity to purchase a home if they so choose. If you need assistance or would like to see available homes in your area, contact us directly at BrandyCoffey941@gmail.com or 941.404.4737.


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 Keller Williams Island Life Real Estate         The Coffey Group Fine Homes International                   Longboat Key Island Office               Coffey & Divald Property Management

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