The unique mortgage needs of millennials

Millenials have unique mortgage needs. In case you aren’t one, or don’t know what they are, a “millennial” is the generation born between 1980 and 2000; a generation that has come of age with digital technology and that, unfortunately, inherited a recession in 2008. Most millennials face dimmer job prospects than the generations before them and most have the unique burden of college loan debt to factor into their debt-to-income ratios when buying a home.

Now, most millennials are old enough to be buying their own home and starting their own families, but few have because of the recent shifts in the real estate market and their loans. As of now, the first-time homebuyer ratio in this country has dropped from the usual 40% of all real estate buyers to less than 30% of all buyers. By 2020, one third of all adult Americans will be a millennial, and by 2025, they will be 75% of the workforce.  Millennials also have different investment strategies than their parents: millennials keep more of their assets in cash, eschewing stocks. They’re great savers, meaning that many will find they have the necessary downpayments for a home purchase, but since they tend to have a more fiscally conservative outlook than previous generations (and can you blame them after they witnessed the recession?) they are less willing to take on the financial risk of a home loan.

When they do take on a home loan, a millennial is more likely than any other age group to be up to date on their home loan payments, according to the credit reporting company TransUnion.

Millennials are incredibly tech savvy, having grown up with the Internet, and it is absolutely key that they have access to online information and are able to reach their mortgage banker and real estate agent at any time via phone, email, or text. They want to see visuals of their prospective homes online, check mortgage rates on a daily basis using the newest apps, and do most of their legwork sitting down and using digital technology before making a move to buy.

Millennials also value different things in their new homes than their parents’ generation. School Districts are very important to them, and they will seek neighborhoods like Manhattan Beach and other South Bay areas to be near good school systems (according to studies by They also like homes that are up-to-date, and prefer office space to dining rooms. They want homes that are close to city centers, but functional and manageable. Homes that are wired for smart technology are also at the top of their list.

Millennials may worry that they don’t qualify for a loan, or that they won’t be able to recognize a good real estate investment when one comes their way. That’s my job. I am here to advise millennials about their options in terms of mortgage rates, debt-to-income ratios, South Bay neighborhoods, and the long-term return on property values in the South Bay.

How do I know all this? I’m a millennial (just barely).

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