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When it comes to today’s real estate market, millennials play a major role. According to the National Association of REALTORS?, the group makes up the largest share of homebuyers at 37 percent, and according to RISMedia’s 2019 Power Broker Report, first-time homebuyers/millennials represent the largest opportunity for business in the year ahead, according to the majority of responding brokers.
Millennials are so keen on homeownership, in fact, that a growing contingent are putting buying a home before marriage. According to recent research from LendingTree, 24 percent of millennials say they are postponing marriage until after they buy a home. Additionally, 27 percent of millennial buyers are postponing parenthood until after they’ve bought a home...and 2 in 5 of all homebuyers are waiting to get the house before they get a pet.
No matter whether millennials are prioritizing marriage or home, the research reveals that more education about the home-buying process is needed either way. For example, while most home closings take 45 - 60 days, nearly half of first-time homebuyers surveyed believe the mortgage closing process will take 15 - 30 days, and about 14 percent believe it will take less than 15 days.
First-time buyers also need more education on the importance of good credit when buying a home. According to the research, just 15 percent of first-time buyers have a score of 740 or higher. While nearly 2 in 5 reported that they aren’t satisfied with their credit score, more than a quarter of them haven’t taken steps to improve it.
Despite credit-score woes, however, the two main obstacles to buying a home are low income and lack of savings. Nearly a third reported that a lack of income has held them back from buying a home, and another 27 percent claim a lack of savings has caused the delay.
LendingTree offers the following tips for first-time homebuyers to help them achieve their goal:
Save as much as you can for a down payment, closing costs and moving expenses, and also look into down payment assistance programs.
- Have a clear picture of the mortgage amount you can afford, realizing that your monthly mortgage payment includes property taxes, homeowners insurance and mortgage insurance if you put less than 20 percent down.
- Generally speaking, your total monthly debts, including your mortgage, shouldn’t exceed 43 percent of your gross monthly income.
- Get pre-approved for a mortgage before you start looking for a house. A pre-approval tells you how much a lender is willing to lend you and at what interest rate.