Palm State Mortgage Company knows that millennials often prefer renting to buying. In fact, so much has been said about the millennial’s poor relationship with real estate that we almost hesitate to discuss it.
However, we feel obligated to share some valuable statistical trends so that millennials, as well as other new home seekers, can make some informed decisions on an age-old question: Should I rent or buy a house in the coming New Year?
according to the experts, “Even with their unique financial and living situations, it is still better for millennials to buy a home rather than rent in most cities. To understand how we have discovered this trend, lets look at the assumptions made by Tulia when it publishes home-buying data.
The Previous millennial Profile: (Out With the Old!)
When investigating our home buying habits, Trulia created a model of the American family. They assumed the following about the life of the American household:
A. They take a 30 year, fixed-rate mortgage.
B. They provide 20 percent down payment.
C. They move every seven years or more.
If this doesn’t resemble an average millennial household to you, you are correct. Trulia’s own investigation found the following details in millennial families.
The New millennial Profile: (In With The New!)
A. People ages 25-34 move more often. They typically move every five years.
B. They can typically afford only a ten percent or lower down-payment.
C. Only one point holds true: They like the 30 year, fixed-rate mortgage.
millennial: The New Model Family
You will be happy to know that in the last issue of their Rent vs. Buy report, Trulia took the new factors above into account for millennials.
They also tallied their statistics based on a 3.85% mortgage rate on a 30-year fixed-rate loan, with itemized federal tax deductions and a 25% tax bracket
millennial: What You Need To Know Before You Rent In 2016:
- When all the results were tallied, and all the economic forecasts were considered, the conclusion was, “Buying is not only 23% cheaper than renting nationally, it is also cheaper than renting in 98 of the nation’s top 100 markets,” according to Trulia’s expert statisticians.
There is wiggle room in the statistics of course. Some areas of the country show that renting and buying are not that widely separated in terms of basic price. Palm State Mortgage notes that the difficulty in some of these areas might be saving a down-payment
2. Likewise, we want you to be aware that “home-price growth has outpaced rent growth since 2012, which favors the rent side of the buy vs. rent equation.” However, on the buy side of the buy vs. rent equation,
the incredibly low-interest rates re-balance the issue in favor of home ownership.”
3. millennials are changing their attitudes toward home-buying. Experts have also released survey data that prove “more millennials want to buy homes between now and 2018, according to Trulia.com.
Just 65% of millennial-aged borrowers (ages 18 to 34) wanted to own a home in 2011, according to the real estate group. That number has increased to 80% for 2015, up from 78% in 2014. And one-third of those will want to buy in the next two years…”
By the way, here at Palm State Mortgage Company, in wonderful Winter Park, Florida, we pledge to find you the best lender for your financial situation, whether you are a millennial, or not!
Likewise, you do not have to be a millennial to check out the differences between rental prices and home mortgage prices in your area. Just feed some answers into a few questions and a calculator tool at this convenient website will show you the difference in dollars, for any part of the country.
A Special Wish From Our Family at Palm State Mortgage Company, to yours:
We want to take this opportunity to extend our heartfelt good wishes to you during this exciting holiday season. We hope you are enjoying your preparations for a heart-warming celebration with family and friends.