Entering the workforce and beginning to carve out lives of their own, the Millennials have captured their share of attention over the last decade, and that’s proven particularly so in the real estate game where one in three homebuyers come from the Millennial set.

As the nation’s largest, most active share of homebuyers, outpacing both Gen X and the Baby Boomers, much has been written about the Millennials’ real estate habits. But not all of the headlines hold up to reality, according to recent data from the National Association of Realtors’ 2018 Home Buyer and Seller Generational Trends Report.

 

Millennial Myth #1: Millennials aren’t interested in owning a home.

There’s a popular misconception that Millennials are quite content bypassing homeownership, a traditional marker of adulthood. In reality, however, nearly half of Millennials listed “desire to own a home of my own” as their primary reason for purchasing a home.

Millennial Myth #2: Millennials are flocking to the city and rejecting the suburbs.

It’s true that urban life has proven alluring for many in the Millennial generation, but that has not necessarily translated to the real estate market. Only 15 percent of recent Millennial buyers purchased a home in an urban area or city center. In fact, more than half (52 percent) chose a home in the suburbs or in a subdivision.

Millennial Myth #3: Millennials have snubbed single-family homes.

A common argument holds that Millennials are most interested in condos, townhomes, and lofts and have little interest in single-family homes. Yet, among recent Millennial homebuyers, 85 percent purchased a detached single-family home.

Millennial Myth #4: Millennials aren’t financially prepared to purchase a home.

Saddled with school debt and reportedly incapable of saving, Millennials have been painted as financially ill-prepared to own a home. While school debt is real – nearly half (46 percent) of Millennial homebuyers carry student loan debt with the median tally coming in at $27,000 – three out of four Millennial homebuyers actually turned to their savings for a down payment. Yet more, only one in 10 named getting a mortgage as the most difficult aspect of the buying process.

Millennial Myth #5: Millennials don’t pursue homeownership for fear of buyer’s remorse.

Millennials have been labeled a fickle bunch, a group accustomed to returning items they’ve purchased and glossing over their missteps. Yet, only 1 percent of recent Millennial homebuyers regretted having purchased their home when they did or wished they had waited. That means 99 percent report happiness with their purchase.

Millennial Myth #6: Millennials are leading the tiny house movement.

Sharpened by the Great Recession and a desire to shed non-essentials, Millennials have been tabbed as leaders of the tiny house movement sweeping the nation. But make no mistake, Millennials enjoy their space. More than half of recent Millennial homebuyers purchased a new home of at least 2,000 square feet while one in four purchased a home of at least 2,500 square feet.

Millennial Myth #7: Millennials only care about the snazzy finishes.

It’s popular to think Millennials can be fooled by the proverbial lipstick on a pig, so entranced by high design that they don’t much care about craftsmanship and quality. But for a good chunk of Millennial buyers, the fundamentals matter. One in four Millennial buyers listed the installation of windows, doors, and siding as very important, while 30 percent wanted energy-efficient features that contributed to reduced heating and cooling costs.

Millennial Myth #8: Millennials aren’t willing to put down roots.

Millennials are accused of being a transient group, shifting from job to job and address to address because they’re averse to commitment. Among recent Millennial homebuyers, however, nearly one in three expect to be in their home for a decade or more and 26 percent expect to be in their home at least 16 years.

 

How Getting a Grasp on the Numbers Will Help You Land Your Dream Home

It is said that knowledge is power – and that mantra rings especially true in the real estate world.

Unfortunately, far too many prospective homebuyers rely on faulty data, assumptions, or arbitrary numbers, especially so when it comes to a home’s purchase price. Buyers, for example, set their maximum budget at, say, $400,000 with no credible rationale for why that figure might be too high or too low. It just “sounds right.” As a result, buyers waste time looking at homes beyond – or even below – their price range, reject promising properties, or fail to develop a budget plan that can lead to the home features they most desire.

There is, however, an easy solution: getting pre-qualified – or even pre-approved – for a mortgage by a reputable loan officer. Such a simple financial step arms homebuyers with relevant information to drive their home search.

First, what’s the difference between being pre-qualified and being pre-approved?

A first step in the mortgage process, getting pre-qualified is rather straightforward. Often quick and free, a lender assesses your overall financial picture, such as current debt, income, and assets before providing a reasonable mortgage qualification estimate.

Pre-approval, meanwhile, takes the pre-qualification process to the next level. It includes a more thorough investigation of your current financial state, including your credit rating. This helps lenders supply a more concrete loan amount and, in many cases, could even allow you to “lock in” a mortgage interest rate.

Whether you elect to get pre-qualified or pre-approved, the result is the same: greater clarity on what you can afford and the key numbers that drive decision-making. You can then act with much greater speed, efficiency, and intent during your home search.

Capturing Real Benefits

Combining your mortgage qualification with the money you have available for a down payment, you will have a more precise idea of the home you can afford. Dealing with real numbers, not assumptions or guesses, you can then set your search parameters accordingly and, critically, also begin to factor in other financial details, such as real estate taxes, homeowners insurance, or HOA fees to understand your full monthly payment.

For those interested in new construction, in particular, having a firm grasp on the numbers will help you better determine any special features you might want add to the home. For example, say you want a bonus room that’s a seemingly hefty $10,000 option. At a 5 percent interest rate on a 30-year mortgage, you will discover that adding that much-desired option will run you $41 a month, or $1.41 a day.

And finally, since the lender already has some of your financial data in hand, the professionals can then hit the mortgage approval process immediately after you find the home you want. That gets you that much closer to your dream home.

The bottom line: when you get pre-qualified or pre-approved for a mortgage, you gain more information and strength to purchase the house you want in the neighborhood you want.

And that’s why knowledge is power.

How establishing open dialogue with your homebuilder can help you land your dream home.

Building a new home will likely be the biggest investment of your life – and perhaps among life’s most daunting experiences.

But it need not be so.

By opening the lines of communication with your homebuilder and establishing transparent and honest two-way dialogue, you can cultivate a healthy relationship that more seamlessly turns your dream home from vision into reality.

It helps when your homebuilder knows your current status

With information on your current living arrangement and where you are in the buying process, builders can share the most appropriate information. If you’re just starting your home search, for example, that lends itself to a more educational and informative discussion than if you’ve been looking at model homes for the last year and are nearing a decision.

It helps when your homebuilder knows your budget

Understandably, you may want to hold your financial situation close to the vest. Sharing some general budget parameters, however, helps the homebuilder introduce suitable homes in the most efficient way possible and bring the most relevant information to the table sooner rather than later.

It helps when your homebuilder knows your timeline

Sharing any factors affecting your timeline allows the homebuilder to craft a thoughtful game plan that works to your benefit. For instance, if you’re relocating to the area and in need of a home ASAP, the builder can point out ready-to-move-in homes. On the other hand, if you’re in your current lease for another 11 months, the builder can detail ways the building process might be stretched out to best accommodate your needs.

It helps when your homebuilder knows your must-have features

Whether it’s second-floor laundry or a first-floor master suite, a flex room or finished basement, a focused discussion about your must-have features and design style will help a homebuilder suggest applicable models. This conversation can also help the homebuilder introduce ways existing home plans can be modified to meet your desires.

It helps when your homebuilder knows your lifestyle needs

Sharing information about your lifestyle needs and work situation can help the homebuilder better pinpoint solutions. If you work from home, for instance, builders can share ways a private home office can be incorporated into different floor plans. If a home member has mobility issues, then the homebuilder can identify modifications to improve accessibility, comfort, and safety.

It helps when your homebuilder knows your accessibility

Sharing details about your daily accessibility, such as if you work nights or will be traveling out of the country for a month, will help the homebuilder contact you at the most convenient times and expedite decision-making. Without this, you might miss out on a desired lot or encounter construction delays.

Create a productive working relationship

As much as you want to know about a prospective homebuilder – the firm’s track record, its floor plans, its standard features, and so on – sharing some important information with your homebuilder can spark a more straightforward, stress-free, and seamless experience that delivers the home you desire.