3 Things Millennials Should Know Going Into 2021
If you’re like many millennials, this pandemic has made you reevaluate your current living situation and wonder if you are ready for a home of your own. It’s been an eye-opening year for sure. Despite being the group affected most by the economic downturn, millennials remain motivated to make a move.
2020 was a record-setting year when it comes to mortgage originations, especially among Millennials. In fact, in September, the Ellie Mae Millennial Tracker reported that 61% of all purchase loans this past July were made by homebuyers between the ages of 21 and 40. That’s a huge number, and an even bigger indicator of what’s next for the housing market. Here’s some things Millennials should know going into 2021:
- You’re likely more ready to purchase a house than you think you are.
Studies have shown that many are actually financially prepared to apply for a mortgage loan but have yet to do so. Are you one of the nearly 46 million who are financially ready to get started?
- Record low interest rates contribute to wider affordability and an increase in buying power.
Interests rates have remained low and are expected to continue to remain low into 2021 thanks to federal policies. The median income needed to qualify is much lower than in the past, and buyers can generally afford homes with a larger price-tag as well. For example, because of lower interest rates, buyers can now afford a $318,000 home instead of a $300,000 home, with the same monthly payment according to the Arch MI Insights blog.
- Down payments aren’t as hefty as they once were and, if it’s still an obstacle, assistance is available!
Many non-homeowners believe you need a down payment of at least 20% to purchase a home and this just isn’t the case. The average down payment amount for first time homebuyers is much lower, sometimes as low as 3%. There are many, many down payment assistance programs available to help. Plus, there are other forms of assistance such as receiving gift funds from a friend or relative. Don’t let down payment misconceptions hold you back from homeownership!
If you’ve been contemplating making the coming year the year of homeownership, get a head start with a no-cost, zero-obligation pre-approval. Locking in a low rate today can benefit you for years to come. We’re here to help and are ready when you are! Connect with a Cambria Mortgage professional to review your options today! 952-942-0110 / CambriaMortgage.com
Bigley, E., & Coffee, C. (2020, September 2). Millennial Purchase Market Continues to Heat Up Amid Peak Homebuying Season, According to Ellie Mae Millennial Tracker. Retrieved December 16, 2020, from https://www.elliemae.com/about/news-reports/press-releases/millennial-purchase-market-continues-to-heat-up-amid-peak-homebuying-season-according-to-ellie-mae-millennial-tracker
Financial Barriers to Millennial Homeownership: HUD USER. (n.d.). Retrieved December 16, 2020, from https://www.huduser.gov/portal/pdredge/pdr-edge-featd-article-041519.html
Jumpe, J. (2020, December 09). Five Positive Messages for Millennial Homebuyers. Retrieved December 16, 2020, from https://insights.archmi.com/five-positive-messages-for-millennial-homebuyers/