Are Millennials Buying Homes In Denver?

There has been a lot written about millennials and home buying. The general consensus is that they are not big on home buying like the generations before them were and are. Denver millennials are no different. Here’s why.

Cool areas of Denver

Are Millennials Buying Homes In Denver? There has been a lot written about millennials and home buying. The general consensus is that they are not big on home buying like the generations before them were and are. First, millennials have so many cool areas of Denver to choose from to live, so why be tied to a home they have to sell to move to another? Areas like Washington Park are a cool choice for a younger generation. Wash Park, as it is called has amazing spaces for jogging, walking and biking, and also a center for community involvement and socializing.

Washington Park has two lakes and the “Lily Pond” and carriage-ways that meander through the park, a 2.6-mile jogging path, 2 peaceful flower gardens, soccer fields, 2 playgrounds, 1 basketball and roller blade court, 1 horseshoe court, 10 tennis courts and a lawn bowling green.

Convenience

Millennials as a rule just don’t want to be tied down by something as permanent as a home and mortgage. Some avoid it out of fear of financial disasters, but most avoid it out of convenience. When you rent, the most you could be tied to a property is a year or two. If you need to move you don’t ruin your finances by defaulting on a mortgage. Instead they can ask a landlord to let them out of a lease.

Many apartment complexes offer apartments that have amenities that if they were buying in a home would make that home out of their price range. Things like well appointed apartments, pools, fitness complexes, fire pits, and more.

Money

That leads to the last reason why millennials are more apt to rent over buying in Denver: less money. High amounts of college debt and difficulty in finding higher paying jobs makes it difficult to qualify for a mortgage. Don’t give up as a seller, though. The number of millennials now buying are rising.

Why Millennials and Baby Boomers Are Renting Homes

The conventional wisdom is that buying a home is the best use of your money. What some are finding is that isn’t necessarily the case. This is especially true of baby boomers and millennials. In many ways they are better off renting. Here are a few reasons why.

Baby Boomers

Why Millennials and Baby Boomers Are Renting HomesFor baby boomers renting after retirement actually makes sense. Boomers are downsizing in record numbers. Their children are grown and out of the home and they find that there is no need for the larger home. Instead of opting for a retirement community or assisted living home, some are seeing that renting a home or apartment is a better option. Apartments make basic cleaning and maintenance a lot easier for anyone.

Maintenance is a big reason for renting. Not only for basic cleaning, but also when things break.

In their owned homes if the kitchen sink backed up they would call a plumber. In a rental if the kitchen sink backs up, you call the landlord who calls the plumber… and pays the plumber as well.

Renting provides flexibility for boomers as well. If, as they age, they find they need more help than an apartment will provide, they have the flexibility to move into an assisted living facility without having to worry about selling a home.

Millennials

For millennials renting provides some of the same benefits as for boomers. Millennials are just getting started so the need for a large home isn’t there yet.

The same maintenance issues are solved for millennials renting. They don’t have the know how to fix things since the landlord does it all. They also need the flexibility since getting started in a new career may entail a move. Being able to be move more quickly than you could if you owned a home is important for those looking to be upwardly mobile in a new career.

For millennials the expense is also a key factor. While it may seem cheaper to buy a home, there are hidden expenses. Things like real estate taxes, condo fees and those costs to maintain your home.

So if you are a boomer or millennial, weigh your options and don’t be afraid to go back to renting. It might be the exact solution to all your questions.

Are The Millennials Going To Buy Houses?

In the real estate world one of the biggest questions is Millennials.The question now is are they going to buy houses. It’s important because millennials are in the age group of first time buyers.

Are The Millennials Going To Buy Houses?The market has been much stronger but one area where it has lagged is the first time buyer market. It’s the lowest in almost 30 years. That may be alarming, but those in the know think that the drop is a long term thing. Millennials are putting off buying into the American dream, but they haven’t given up on it. While this is good news in the long run, in the short term it will be an issue.

Economic issues

At the moment this age group is shunning home buying. This is for a few reasons. Millennials watched their parents deal with the housing crash, making them more cautious about taking out large mortgages in order to buy a home. They are also, as a group, dealing with massive student debt loads that put a strain on their income and what they are able to save. They are also having a harder time finding employment and while that has become a smaller issue in the last few years, it impacts their decision making.

Marriage choices

Another reason they are holding off home buying is that most first time home buyers are young married couples who are settling down. However, Millennials are marrying later. Under age 34, just 24% of women and 30% of men are married, about half the figure for that age group in 1940, according to the Pew Center. The median age of first marriage is now over 29 years for men and 27 for women. That means that they will be in a life position to buy later, say about 35 to 40 years old.

So it’s a mixed bag, but the pieces will fall into place and they will buy houses in the future.

Help For Millennials Who Are Ready To Buy Denver Houses

Good news for Millennials who are ready to buy a home in Denver! The Colorado Housing and Finance Authority has started a new program to finance and help buyers with down payment and closing cost assistance.

Qualified buyers can finance up to 5 percent of the purchase price of a home. For Millennials, who may be looking at renting versus buying, that may mean that their mortgage payment could be the same as rent. So why not invest in your future by investing in your own home?

A grant program

Help For Millennials Who Are Ready To Buy Denver HousesThe program is a grant program, which means that assistance given doesn’t have to be repaid. The catch is that grant recipients must pay a higher interest rate on their mortgage which is also made through one of CHFA’s 90 lending partners. The current rate through CHFA is 3.75% on a 30 year fixed rate mortgage. A borrower who requests assistance for 3% of their down payment would pay 4.25%. A borrower who requests assistance for 2% of their down payment assistance would pay 4.5%. A borrower who only needs to finance closing costs would pay 4%.

Borrowers show typical requirements

Borrowers have to show typical requirements to get a mortgage: steady employment, income to pay the mortgage and a FICO credit score of at least 620. The grant program also requires borrowers to attend a homebuyer education course and contribute $1,000 toward the home purchase. The best part of the program is that you don’t have to be a first-time buyer.

Making the American dream attainable

Owning your own home is the American dream. Many Millennials have given up on that dream because of the housing crash. They’d rather not be tied down to a home that could become an anchor around their necks, as it may have been for their parents. But the market is improving, interest rates are ridiculously low and rents are not. Kudos to CHFA for doing something to make the American dream more attainable!

If you would like to find out more about this amazing program, give Tena a call today! 303-452-5853

Millennials Are a Rental Real Estate Investors Dream

Good news for rental real estate investors, according to a New York Times article Millennials are more apt to rent over buying. Here’s the scoop:

No Picket Fence: Younger Adults Opting to Rent, New York Times

Rent Versus Ownership

So why would Millennials look to renting over homeownership? A few reasons. First, they lived through the housing bust as Millennials Are a Rental Real Estate Investors Dream teens or early twenty somethings and saw family members and friends get hurt by it. They watched people they cared about being stuck with homes they could no longer afford, but also couldn’t sell. It’s had an effect. Fewer are willing to take that risk regardless of whether the market has rebounded.

Millennials – Reasons To Rent

Other reasons also have to do with not having to be tied down to a mortgage, but not out of fear, but out of convenience. Renting means that moving due to a job or for whatever reason is much easier. There is a huge difference between a year lease and a 15, 20 or 30 year mortgage.

Apartment complexes are taking advantage of that and offering all kinds of amenities that homeownership may not: well appointed apartments, pools, fitness complexes, fire pits, waterfalls, units with things like built-in iPod docking station hard-wired to speakers that pipe music throughout the apartment and link to TVs, and more. Things that would cost way too much due to the type of home that would have those types of amenities.

Hard To Qualify

Another reason many Millennials don’t look at homeownership is because they can’t qualify for mortgages. High amounts of college debt and difficulty in finding higher paying jobs makes it difficult to qualify for a mortgage. Renting can give them the ability to save towards a home later in life. It also means that they have more spending money for things like the weddings they are attending of friends and family members their age.

For whatever reasons, Millennials are hesitant to join the ranks of homeowners. It may change as they mature, but for now, this is good news for rental real estate investors.