Problems Facing Millennial Home Buyers
In a shift from past real estate trends amongst millennials, many are now showing increased interest in buying homes rather than renting them. However, lack of affordable options may pose an issue for millennials to make this a reality. For South Florida in particular, affordability has raised some concern for young buyers.
Though rising home values have been a cause for celebration for most of the country, millennials with lackluster savings are struggling to come up with the funds for a down payment. According to the Sun Sentinel, it would take up to 6.7 years for the average millennial living in South Florida to save the amount needed to make a down payment. With ApartmentList reporting that the majority of millennials have plans to buy their first home in the next five years, it’s easy to see why this statistic is troublesome.
Another pressing issue is that millennials might not know how much to budget to accumulate a down payment. In fact, ApartmentList recently revealed that projections of young prospective homeowners in South Florida fall short by 29 percent. This means that hopeful millennial buyers will need to be innovative when making their first home purchase and shift to more affordable suburban areas, as the option to stay in the more urban (and more expensive) areas may become less favorable.
Seeking Affordability Elsewhere
As an answer to issues with affordability, many millennials are breaking away from typical trends and looking to buy real estate in the suburbs, rather than continuing to rent in the city. While both options have their own perks, it’s true that buyers can typically get more for their money in suburban neighborhoods. South Florida real estate professionals expect to see millennial buyers shifting from the Miami and Fort Lauderdale areas to suburban towns in both Palm Beach and Broward County.
Some financing options are available to millennials looking to purchase their first home, such as Federal Housing Administration loans. These loans in particular only require the borrower to put down 3.5 percent, making them a great solution for young people on a budget without much money saved up. Many millennials also report counting on borrowing from or being gifted money from loved ones when it comes time to make a down payment on a home.
For anyone with interest in South Florida real estate, the Stein Posner family is here to help. Our agents are experts in both helping buyers find the homes of their dreams as well as facilitating successful sales for our sellers. Call us today and let us go to work for you.