The next generation of home-buyers are coming on strong. The millennials outnumber the baby boomers by 8 million and are estimated to form 20 million new households in the next decade!
Estimates put this generation at 87 million strong. And, if you don’t believe that they will be driving the economy over the next 20+ years, check out TV commercials and online marketing.No more are marketers catering to the baby boomers.
In a DS News online article, HUD Secretary Julian Castro reports that the FHA has opened the doors to the millennials by reducing mortgage insurance premiums, and adding a program called the “Blueprint for access”. The FHA has launched these programs to make housing more affordable and to open the credit box to responsible borrowers.
Let’s face it, the millennials and their future spending power are the future of the housing market and our economy. According to several sources (DS News-Colorado Springs Gazette) millennials have some homework to do before they can enter the market in stronger numbers.
Even though the FHA has added programs for affordability they have not relaxed the criteria for home buying. Millennials along with the rest of the population have to meet 3 data points to open the credit box.
- Good FICO score
- Down payment FHA 3-5%
- Acceptable debt to income ratio
Contrary to common opinion, more and more millennials want to own a home according to an article in DS News titled “Dispelling Myths Around Millennials and Homeownership”. Too much debt (student loans), and not being able to save money are keeping many out of the housing market. However, with the new financing options that exist, many millennials need to do their homework because they may still qualify.
If you are a millennial, Gen X or Y, home ownership, boils down to good credit, low debt load, and a reasonable down payment.
My advice, is sacrifice now, cut back on your life style, pay down some debt and make it happen. We baby boomers are trusting you will show us the money! We need your participation in the new economy and the housing market of the future.