As a young adult, you might be considering owning a home as part of your list of objectives. Many of your peers are already working toward the goal of home ownership. According to Maxwell's 2022 Millennial & Gen Z Borrower Sentiment Report: “Many young adults have demonstrated their resolve to embark on the journey toward homeownership soon. More than half of millennials and Gen Zs plan to apply for a mortgage sometime within the next year.”
Let's look at why homeownership is at the top of so many young buyers' to-do lists and what you should think about if you're one of them so you can accomplish your goals.
Top Reasons to Buy a Home
It's crucial to understand why homeownership is so important to you before you begin the home-buying process. Some of the main drivers for younger generations wishing to purchase a home are revealed by the Millennial & Gen Z Borrower Sentiment Report. It reveals that:
- 95% of respondents think that rent is too expensive.
- 35% believe that owning a home is a crucial instrument for accumulating wealth.
- 16% desire the sense of security that comes with home ownership.
- 37% intend to use it as a rental property.
Whatever your reason, remember that there are many other motivations for owning a home, both financial and otherwise.
Main Challenges and How to Get Past Them
It can be challenging to know where to begin when seeking to buy a home, regardless of whether your homeownership dreams are motivated by financial aspirations or emotional desires (or both). There is a lot to take in, from comprehending the home-buying procedure to obtaining financial pre-approval and researching your possibilities for a down payment.
The same Maxwell survey also identifies significant obstacles for prospective purchasers. Thankfully, you may overcome both with the assistance and advice of an experienced and knowledgeable real estate expert. Here are two common challenges that prospective homebuyers encounter:
1. The Mortgage Application Process Can Be Difficult
According to the Maxwell study, 33.37% of respondents listed difficulty in understanding the mortgage application process as one of their challenges.
A post by OwnUp explains why it's so difficult for buyers to obtain a mortgage: “There is a general lack of knowledge about home financing. Mortgages are a complicated topic with no one-size-fits-all answer. It’s difficult to understand the space, let alone determine what the right course of action is based on your unique financial picture.”
While you might be tempted to run a quick search online to acquire answers right away, this may not provide you with the details you need to fully grasp the situation. You should seek the counsel of a true expert, particularly when it comes to financial advice. Knowing what it takes to realize your dream of homeownership can be facilitated by having dependable experts on your side. Not to mention, a professional may provide you with guidance tailored to your circumstances rather than general information you could discover online.
2. Knowing how much cash you will need is difficult.
According to the Maxwell study, 45.75 percent of respondents feel they don't have enough money saved to pay for their down payment or closing costs. You might be surprised to learn that there are now more down payment aid programs available countrywide to ease this burden. According to a Down Payment Resource report: “Our Q3 2022 HPI report revealed a 1.6% uptick in the number of homebuyer assistance programs available to help people finance homes, raising the number of programs to 2,309, a net increase of 36 over the previous quarter.”
In addition, buyers are regaining some negotiating leverage as the housing market cools, and more sellers are open to working with purchasers to cover closing costs. Your dream of becoming a homeowner may come true more quickly than you anticipated if you have a good understanding of what's out there and your possibilities.
If you're new in the market and are considering buying a home, we want you to realize that your goal of home ownership might be closer than you think. Count on the experience and expertise of Laura Larson who will assist you every step of the way in overcoming any obstacles and organizing your next steps. Call her now!