The Millennial Dream: Home Ownership

For millennials, the dream of home ownership may seem like it’s out of reach. Millennials are living in a time much different than any before, and it can feel like the odds are stacked against them when it comes to financial security and independence. 

Some of the roadblocks that millennials find themselves facing when trying to buy a home may include some or all of the following: 

• Lack of established credit
• Not a high enough income
• Student loan debt
• Saving enough money for a down payment
• Self-limiting thoughts/perceptions about money or home ownership

These and other factors have influenced a trend in millennials with renting for longer than past generations. With that being said, millennials still value home ownership, and, despite misconceptions, they are more than capable of achieving that dream.

Knowledge is Power

A great first step for any millennial pursuing this path is to learn more about what owning a home will entail. A lender is a great source for those types of questions- everything from how much you can qualify for, to how much of a down payment would be required at closing, to how much your monthly payments will be. 

Unfortunately, these types of concepts are often fuzzy or completely unknown to the average millennial and can remain a scary and intimidating prospect without clarification. Getting some real numbers and even taking the actual step of applying to see if you could qualify for a home is a great way to gain some confidence and begin the process of ownership.

Concrete Action

Millennials might feel a sense of “what’s the point?” if they feel overwhelmed by debt, or like they won’t be making enough money any time soon to accomplish their goals. But there are small, actionable steps they can take, even if they get news back from a lender that they’re not able to qualify for a home just yet. Here are a few:

• Track money in an app, or even a good old fashioned Excel spreadsheet. Anything where you can see where your money is going – and where you’d like it to go instead – is going to help make things become more of a reality and easier to manage. 
• Save with every paycheck, and cut out unnecessary expenses. Millennials have been labeled with a stereotype about spending money excessively on things like avocado toast and Starbucks. Whether that’s true for you or not, you should find little purchases that are adding up and see what you can cut out. While you’re at it, check on all your subscriptions to see if there’s anything you could pause or cancel.

Pay off debts. Your debt-to-income ratio plays a major role in getting qualified for a house. There’s no shame at all in putting your nose to the grindstone for the next little while as you chunk that debt away – it’ll bring you one step closer to financial freedom!

Benefits to Home Ownership

Whether you need a reminder to keep your eye on the prize, or you’re close to getting your own home, it’s worth noting the benefits to home ownership, which are many!

• Equity Building – Each payment you make increases your share of your home’s value. Equity increases your wealth.
• Tax Perks – Mortgage interest and property taxes are deductible.
• Stable Payments – Payments stay the same regardless of inflation.
• Security – Ownership secures a place for your family to live and grow.
• Freedom – You don’t have to abide by a landlord’s rules.
• Community – A sense of place and belonging.

You Can Own a Home as a Millennial

Don’t let fear paralyze you with indecision! EDGEhomes is in the business of empowering people to know what the smartest decisions are when buying, and how to find or build the home of their dreams. Our agents are here to help you with any questions you might have, and you can always schedule a visit to see any of our product types in person!