It's going to be an intense house-hunting season -- especially for young buyers.
After years of many experts lamenting how Millennials weren't interested in becoming homeowners, it turns out many are actually diving in. But they're facing a lot of competition.
Millennials are the largest group of homebuyers, according to Ellie Mae, a software company that analyzes mortgage data. In January, Millennials represented around 45% of all purchase loans, up from 42% the same month in 2016.
And many expect more Millennial house hunters to jump into the market this spring buying season.
But their path to homeownership won't be easy.
Millennials are mostly first-time buyers and they are competing against repeat buyers who have more buying leverage and experience. Millennials recently became the dominant group of users searching for homes on Real Estate websites.
New buyers this spring will also be up against buyers who started looking last year, but still haven't bought a home.
A shortage of available homes has driven up prices -- particularly among starter homes that tend to fall within first-time buyers' budgets.
There were 3% fewer homes on the market in February compared to a year ago and home values are up nearly 7%.
That's led to bidding wars and fierce competition, especially in the lower end of the market.
Many first time home buyers are finding themselves in super competitive markets. They’ll get a notification that a house just went on the market and have to go see it that night ... or its out.
Some are finding their perfect home early in their search and put in an offer. But they weren't the only ones. And even going above the asking price, their not the winning bidders as sellers are receiving 10 or more bids.
Rising home and rent prices can make it difficult for many first-time buyers and young people still establishing their careers to save for a down payment.
For first-time buyers looking to become homeowners this year, experts say do your homework: determine your budget, prioritize your requirements and get pre-approved for a loan.
Be first in line - Start your search early - Figure out your budget early on.
Millennials are also facing a tighter lending environment compared to a decade ago as banks stiffen up on credit requirements.
But despite the obstacles they face, Millennial buyers do have a major advantage – Low Interest Rates.
If you compare Millennials access to credit and ability to get into a home, it's far easier for them than previous generations. Back when their parents were buying homes, they had higher interest rates and there weren't down payment assistance programs.
Contact us to get your Home Search started today.