Higher student loan debts. A weak economy. Low job prospects. These are just a few of the things preventing young millennials from “buying” into the American Dream of homeownership.
In fact, new studies suggest that upwards of 38 percent of millennials move back home after college in order to save on living expenses and build their credit and income so one day homeownership can become a reality.
While homeownership among adults ages 18 to 32 is dramatically down, that is not the only alarming trend: for the first time ever, non-grads are more likely to own a home than college grads (because of post-college debt).
While this statistic seems discouraging, there is a bright side. When the life goal of buying a home finally does become a reality, it is met with a sense of pride, accomplishment, and willpower. And, despite the decline in the number of young homeowners, those who do jump in, understand the potential benefits to owning a home, such as:
- Building equity
- Payments that stay the same over time
- Pride in ownership
- No possibility of landlord eviction
- Sense of community
- Mortgage tax write-off
- The opportunity to make improvements, decorate, and remodel to suit your tastes
If future homeownership is a goal of yours (or maybe your son or daughter), then there are a few steps that can be taken now to ensure a step in the right direction. Saving, budgeting, and searching are all part of the process that can turn a potential homebuyer into a homeowner.
1. Save. A good rule of thumb is to save 10 to 20 percent for a down payment and/or closing costs.
2. Get your credit in order. Good credit means better mortgage rates and fewer loan points. It can also allow you to live comfortably with your new mortgage payment because your other financials are in order.
3. Be realistic. A house payment should not exceed more than 30 percent of your monthly take-home pay.
4. Start the search early. By checking out home prices and desirable neighborhoods early, you will have confidence going into escrow. You will be able to successfully gauge fluctuations in the market, interest rates, home values, and features/amenities you can’t live without. Picking the right location ensures you will be happy with your purchase for years to come.
5. Stick to a budget. The creation and follow-through of a budget will not only help you to save towards a down payment, it will also help you map out your spending habits and how a home purchase will affect your quality of life and cash on hand.
There is a lot to be said when the time, attention, and money is given to become a first time homebuyer. It is a lofty goal in itself, so having the right team behind you means a happy, enjoyable, and streamlined process.
If you are thinking of buying a new home in Bend, Oregon, contact Greg Welch Construction. A few minutes on the phone with Greg and you will know exactly why people ask for a Greg Welch home by name. He takes the time and attention to build you the perfect home, so all you have to worry about is how you want to decorate it!