HOW MILLENNIALS ARE CONQUERING SOARING HOMEOWNERSHIP COSTS
It’s no secret that housing markets in large Ontario cities are skyrocketing and you’d think that homeownership is out of reach for millennials. While it is more difficult for this group to buy and they are several years older than previous generations before buying their first homes, they are conquering the market and now making up the largest percentage of first-time homebuyers. This begs the question, how are they doing it?
Savvy Millennials stay with Parents Longer
With soaring house prices comes larger down payments and with incomes for millennials being low in comparison, more are opting to stay with their families longer to accumulate savings and build up their credit. According to a study published by HSBC, one in five millennials are moving back home with their parents in order to save more money towards their down payments. In addition, 37 percent receive family help in the form of loans or gifts towards their first home purchases.
Concessions and Compromises
Another way millennials are breaking into homeownership is by making concessions and compromises with the types of property being bought. Many are opting to purchase investment properties in the form of rental units or student housing within their first homes. While the down payment required to purchase an investment property is higher than a single family residence, the monthly contributions towards the mortgage payments puts purchasing a home within reach of more in this difficult generation.
Millennials are Spreading their Wings
Home prices in large centers have increased by as much as 45 percent over the past seven years, making a first time purchase impossible for most millennials. As a result, they are moving further away and making longer commutes. Some are taking advantage of opportunities to work from home, while still others are seeking new employment further afield. The biggest challenge here is that as more people buy in the surrounding communities, the markets there increase accordingly, meaning people have to go even further afield to find affordable homes.
The Bottom Line
First time homebuyers in the millennial generation definitely have it tougher than previous generations, but they are making it work. The HSBC survey has shown that just over a third of millennials have purchased their first homes and of the remainder, 82 percent plan to buy within the next five years. They may be slightly older than other generations before buying, but they are conquering soaring homeownership costs.
Working with a mortgage specialist from ReferralMortgages.com is your key to breaking into the red hot housing market as a millennial. Contact us today and let’s get to work!