Owning a home is beneficial for buyers of all ages. Fortunately, younger buyers are rapidly pursuing homeownership in the United States. The trend is very encouraging because a large percentage of young buyers will be first-time homeowners.
Homeownership Rates in the United States
According to the U.S. Census Bureau, homeownership rates reached 64.8% in the fourth quarter of 2018. The reported figures were marginally better than the year-over-year homeownership rates of 64.2 for the same period in 2017.
Also, the homeownership increase was slightly better than the reported figures that were displayed for the third quarter of 2018 at 64.4%.
The small increases in homeownership are not very thrilling. But, thanks to young buyers, home sales are moving in a positive direction.
Millennial Home Buyers
An increase in homeownership rates is largely due to millennial home buyers. Surprisingly, millennials are buying homes at a later age than previous generations.
Typically, as first-time home buyers who are under 35 years old, millennials are spearheading the homeownership rates in America.
In the third quarter of 2018, the millennial homeownership rate increased 1.2% above third quarter homeownership rate for 2017.
For the third quarter of 2017, homeownership among millennials stood at 35.6%; however, recent reports indicate that homeownership increased to 36.8 for millennials in the third quarter of 2018.
Additionally, first-time home buyers have purchased nearly two million homes annually during the previous two-year period. This information reflects a greater desire for homeownership among young buyers versus renting a place to live.
This trend is growing among millennials with a family to support. Decisions about settling down into a safer neighborhood with good schools are important to young home buyers.
Additionally, a home provides opportunities to build equity, to escape rising rental rates and to have a pet without a landlord’s permission.
Low Down Payment Programs for First-Time Home Buyers
Young buyers who have not saved a down payment of 20 percent or greater toward the cost of a home may be able to finance the bulk of the purchase price.
Programs through the Federal Housing Administration and the U.S. Department of Veterans Affairs help qualified applicants obtain financing for a home without a large percent of the purchase price out-of-pocket.
Young buyers are often attracted to FHA mortgage loans that require a down payment that is as low as 3.5 percent of the purchase price.
Millennials who served in the U.S. Armed Forces and current service members may be able to purchase a home without a down payment toward the purchase price.
Mortgage interest rates are still at historically low levels. In many cases, young buyers may be able to secure a mortgage payment for less money than a comparable home would cost to rent each month.
Prospect Financial Group encourages millennial home buyers to consider the advantages of purchasing a home versus renting.
Contact us today to speak with one of our licensed mortgage professionals about financing and homeownership opportunities for first-time buyers.
Prospect Financial Group
948 Garnet Avenue
San Diego, CA 92109
NMLS: 349089 | BRE: 01837707
Jason Vondrak has been in the mortgage industry since 2004 and co-founded the mortgage brokerage Prospect Financial Group in 2006 in San Diego, California. Today he serves as President and CEO of Prospect Financial Group and the president and founder of Prospect Property Group, a real estate development company, established in 2012.
“I’ve had the privilege to serve in an industry that exists to ensure homeownership remains among the top priorities of government and citizens alike. Over the years, it has been a pleasure working alongside homeowners, real estate professionals, and business associates combining efforts and teaming up to help homeowners realize the dream of home ownership.”