What can Deter a Young Person from Buying a Home

by Tracye Thompson 05/12/2019

Some of the reasons why the young ones are not buying a home are the high student debt, affordability among others. We are going to discuss the primary reasons why young people are not buying a house in this article. Here we go:

Affordability 

One of the main reasons why millennials are not into real estate investment is a substantial financial implication. The home affordability for first-time buyers decreased to about 92.5 in 2018 according to NAR – National Association of Realtors. The index was 109.3 in the year 2015. A value of 100 shows that a family has what it takes to qualify for a median-priced home. 

High level of student debt

Another reason why many young people could not afford a home is the high level of student debt. In the United States, student debt reached $1.5 trillion, and it is one of the factors that are hindering young people from investing in real estate. Apart from high student debt, they also have to deal with meager wages. The NAR report explained that more than half of the homebuyers who are below the age of thirty-eight that student debt is one of the significant factors that delayed their home buying. Apartment list shows that graduate that does not incur student debt will save for 7.6 years at 20% down payment to get home while those with debt will have to save money for more than 11.6 years.

Tighter Lending 

If you are wondering why young people cannot afford a home, one of the reasons is stricter lending conditions. Financial institutions have tightened credit underwriting to minimize risk. The rise of house prices does not favor the young ones who are planning to buy a home. They will have to accumulate enough cash over a long period to enable them to afford a house. The Bank of America noted that those within the age of 25 to 35 years commenced their career at the time of financial crises when the labor market and economy were recovering.

Not Married Yet 

The delay before getting married and having children means that young people are not considering getting a home sooner. The CDC (Center for Disease Control) reports that the mean age of a first-time mother is now 26.6. They discovered these findings in 2016; they added that the average age might increase when we consider the women in urban areas as well as college-educated women. According to the Census Bureau, getting married and having children are life events that trigger buying a home.

As a young person looking to buy a home, you should speak to a financial advisor and a reputable real estate agent to plan towards owning your own home.

About the Author

Author
Tracye Thompson
Originally from central Florida, Tracye came to Northern Virginia after a 20-year military career. The Marine Corps took her too many places around the globe as she worked through the ranks. Tracye has taken those experiences and applied them to good business practices. Buyers and sellers appreciate her systematic approach to their real estate. She ensures that her clients are well informed, which enables them to make all of the decisions required in the real estate transaction. Tracye delivers a level of service that consistently exceeds her clients’ expectations, which accounts for the majority of her business comes from word-of-mouth referrals. She is a resident of Stafford and assists clients throughout Prince William County and Fredericksburg. Tracye knows the area and understands how economic cycles affect the market on a daily basis. She helps her clients to navigate the often complex steps of a purchase or sale, from the first meeting to the closing table. If you are ready to make the commitment to move forward on your next home, call or email Tracye for the information and assistance you can trust.