Work with independent mortgage brokers

In a study conducted by United Wholesale Mortgage, 90% of real estate agents who worked with an independent mortgage broker would recommend one to their buyers in the future.

Gathering of Eagles

The Gathering of Eagles conference is the Trusted Source, offering brokers, managers and leaders valuable insider industry information on how to run a profitable business.

RealTrending: eXp’s Glenn Sanford

Glenn Sanford, CEO of eXp World holdings, addresses his critics about his agent referral program, where he is taking the company next and growth limiters for the brokerage.

Newsletter

The RealTrends monthly newsletter is known as the trusted industry source for information on trends, strategies, analysis, people and news shaping the real estate industry of tomorrow.

Overcoming Barriers to Millennial Homeownership

Overcoming Barriers to Millennial Homeownership

There is no disputing that there are barriers to millennial homeownership.

A recent study from the Federal Reserve found millennial homeownership for adults ages 24 to 32 fell 9 percent from 2005 to 2014, landing at 36 percent. The homeownership rate for the general population fell 4 percent, for an overall rate of 65 percent in 2014.

The Fed study points to a dichotomy: College graduates are more likely to be homeowners than those without higher education; but increasingly, young college graduates are paying off student loans, making it harder to save a down payment.

The researchers say about one-fifth of the decline in homeownership by young adults was tied directly to student debt, translating into 400,000 borrowers who could have owned a home by 2014 but didn’t because of student loans. The Fed study points to the impact of credit availability, noting that credit was easier to obtain before 2008: “Following the (housing) crisis, loan underwriting may have become more sensitive to student loan debt, increasing its importance in explaining declining homeownership rates.”

Additionally, having student debt early in life leads to having a lower credit score later, say the Fed researchers.

The Fed’s findings are similar to research undertaken by the Student Loan Review, which found that it takes 12 years on average for millennials with loan debt to save for a 20 percent down payment on a home. The vast majority (83%) of people age 22-35 who haven’t bought a house blame their student loans.

But then, there are millennials like Ben Mizes, 25, who began buying properties two years ago and went on to launch a real estate marketing firm. His firm, Clever Real Estate, based in St. Louis, connects buyers and sellers by offering rebates to buyers and lower listing fees for sellers.

Millennials, Mizes says, “have a preconceived notion that buying a home is totally unaffordable. That you have to have money in the bank.” He notes that there are options for first-time homebuyers to purchase with just 3.5 percent down.

 

Millennial Homeownership Ben Mizes, of St. Louis-based Clever Real Estate, began buying investment properties when he was 23.

 

 

Clever Real Estate surveyed homebuyers to get a better understanding of buyers’ perspectives across multiple demographics, and released the findings in a recent report, “Millennial Home Buyers Are Not Who You Think They Are.”

Clever’s survey found that 84 percent of millennial homebuyers believe homeownership is still the American Dream.

But one insight does not bode well for younger homebuyers: Thirty-one percent of millennials were looking for starter homes in the range of $100,000 to $200,000.

“Now you’re competing with investors, and it can make homeownership more difficult,” says Mizes.

As an investor who owns 22 doors, his insights are apt. But Mizes may be an exception; he graduated college without student debt.

Most Popular Articles

RealTrending: Tom Ferry reveals top ways for brokers to increase per-agent productivity

Tom Ferry, founder of Tom Ferry International, takes his years of coaching brokers and boils it down to the top things brokers need to do today to increase per-agent productivity, why he thinks some brokerages have rocket-ship growth and how to manage teams.

May 10, 2021 By

Latest Articles

Equity-rich homes outnumber underwater homes 7-to-1

Homeowners continued to see substantial home value and equity growth in the first quarter of 2021 as the real estate market remains pandemic-resistant, with equity-rich homes outnumbering “seriously underwater” ones by seven to one, according to a new report.

May 14, 2021 By