“Will the younger generation please step up and start buying houses?”
That seems to be the question of the New Year!
For reasons we can easily understand, this group – those who “came of age” since the year 2000, are far behind earlier generations in terms of home ownership. It seems likely that this isn’t as much a radical change in the culture of homeownership, as it is adelay.
It’s been a rough decade, with a huge run up in home prices between 2004 and 2007, and our millennials watched older homeowners and some of their peers that bought with zero down get smacked in the face as the market crashed and prices went lower and lower for the next 4-plus years, generating short sales and foreclosures.
And simultaneously the mortgage industry spiraled rapidly down the tubes.
And the job market got worse and worse.
Finally things started picking up again, certainly in Seattle, and each of the last 3 years has seen higher housing prices and better employment rates, than the year before.
The majority of the people who have been buying, however, are move-up (or over, from another city) buyers or down-sizing buyers, or investors. Those millennials are lagging behind.
Now that rents around Seattle are so high (average price for a 1-bedroom apartment in parts of Seattle is over $1700/month), real estate brokers are speculating that we may have reached a tipping point for younger, first-time, homebuyers; mortgage/property taxes/homeowners insurance isn’t much more – and is sometimes less – than a monthly rental payment.
Fannie Mae and Freddie Mac have just announced a 3% down payment program which should prove enticing for those who haven’t been able to save up the 20% required for reasonable mortgages in recent years.
I’m curious – what do you think about all of this? Let me know your thoughts, and contact me if you want more information!
