HousingWire.com just reported on a survey by Digital Risk. 1,344 Millennials were surveyed about home buying and financing in the survey. For perspective, here's a quote near the beginning of the article:
"After reviewing the survey's results, Digital Risk managing partner Jeff Taylor said, "The findings suggest that the absence of first-time buyers in the market is more a matter of facing up to economic headwinds than to a reluctance to buy a home."
It seems that even though they're not yet flocking back to the market, there is a desire on the part of many in this younger generation to buy a home. Here are the high points:
• Have you purchased a home within the past five years?
o 26.59% YES, 73.41% NO
• Are you interested in purchasing a home within the next five years?
o 69.57% YES, 30.43% NO
• Are you currently a homeowner?
o 28.20% YES, 71.8% NO
• What best describes your current housing situation?
o 60.10% rent an apartment or house
o 36.06% live with family or friends
o 3.83% Other
• Where did you find the home you most recently purchased?
o 47.49% with a real estate agent
o 29.82% on the Internet
o 10.55% word of mouth
o 5.28% open house
o 5.01% yard sign
o 1.85% magazine or newspaper
We can see that most of them would like to own a home within the next five years. Now that we know a little about their current situation, what are their concerns and challenges? Then those who had been in a home buying process recently answered some questions about concerns and definitely affordability and financing:
• What was your primary concern during the home buying process (choose up to 3)?
o 43.27% overall affordability
o 34.83% coming up with a down payment
o 28.76% closing costs
o 23.48% getting mortgage approval
o 21.64% financial stability
o 20.05% committing long-term
o 16.09% dealing with banker, real estate agent
o 15.04% home price volatility
o 14.51% job stability
• How much was your down payment?
o 26.02% paid 1% to 5% down
o 22.57% paid 20% to 29% down
o 20.38% paid 10% to 19% down
o 10.03% paid no down payment or got it from somewhere else
o 7.84% paid 6% to 9% down
o 6.90% were unsure
o 6.27% paid more than 30% down
• Did you receive financial assistance from family or others for closing costs or down payment?
o 37.30% YES
o 63.70% NO
There could be some interesting conclusions drawn from this survey. You can't do anything about job prospects or their concerns and financial stability. However, if you want to sell a home to a Millennial, there are some things that look like they would grease the wheels.
Help with closing costs and/or down payment:
This is pretty clear. There is a desire to own, but in many cases there isn't enough money to get the deal done. Helping them to pay the costs and down payment can be the most effective tool in getting their signature on the dotted line.
You can't get them qualified, but if you're an investor, build relationships with aggressive lenders and mortgage brokers who are willing to make a deal happen with a younger buyer.
There appears to be interest in buying by this generation, even if there are also challenges. Helping them to overcome the issues is how to get deals done.