After a few years of steady seller’s market real estate conditions, the market tailed off fairly significantly through the latter part of 2018. But now that 2019 is here and in full swing, there are some signs of life in real estate once again — and surprisingly enough, it is from the Millennial generation.
That’s right, Millennials. You know, the generation that’s often the butt of jokes. The generation that would rather spend disposal income on travel rather than saving for a down payment on a home. The generation that doesn’t stay in a single job for more than 2 years before moving on to a new opportunity. Yes, you know Millennials. Millennials take a lot of flack, but they’re good for a lot of things too — and in 2019 and beyond, some of this good will likely be observed as it pertains to the stock market.
Today, only about one out of every three Millennials owns a home, a trend that’s significantly behind other generations of Americans. In fact, the U.S. Census Bureau says that this homeownership rate is nearly 10 percentage points below the Gen X generation. The good news is that this is poised to change moving forward, as some of the factors that once prevented Millennials from entering the housing market (i.e., student loan debt, traveling abroad, relocating for jobs, etc.) have begun to work themselves out.
With this in mind, we thought it would be fitting to take a look at some of the key do’s and don’ts that Millennials — and any other homebuyer — should be keeping in mind before closing on that home.
Do — Consider routine maintenance costs: Even if your would-be home received a glowing report from the inspector, don’t be naive into thinking that nothing will ever go wrong. It’s said that you should be counting to spend 1 percent the purchase price of your home each year on maintenance. Other costs you need to account for include insurance and association fees, though those are less hidden than maintenance.
Don’t — Forget about closing costs: Closing costs can add several thousand dollars to the home transaction. Make sure you know what to expect throughout the entire process so you can house shop accordingly.
Do — Remember that location matters: We get that young homebuyers may not have children and may sacrifice neighborhood to be able to afford the type of home they want. But settling for a home in a higher-crime area is one of the bigger regrets that first-time homebuyers report. Remember that location matters, both now and if you go to sell your home in the future.
Don’t — Outkick your coverage: Don’t bite off more than you can chew with a new home. About one out of every three Millennials that purchased a home said they took on a second job to help afford it. You don’t want to be a slave to your home. Make sure you fully understand the hidden costs of homeownership and take on a mortgage that you can comfortably afford.
Don’t — Rely solely on Internet listings: This one should go without saying, but you should never just rely on listing photos you view online. Make sure you go see the home in person, and only consider making an offer on the home after you’ve seen it. We get how everyone is busy these days and it can be hard to find the time to house shop, but it’s imperative to the process.
Do — Work with a good agent: A good agent can be a huge asset when it comes to home buying, especially for first-timers that may not be familiar with the lingo and details that go into the search. Make sure you work with an agent that specializes in the area you’re most interested in looking for homes in.
Continued economic growth and decreased unemployment numbers are expected to keep the housing market on track in 2019, and Millennials are finally looking like they’ll be a major player. If home buying is done smartly, it’s a big part of living the American dream.