5 Reasons You Can Afford To Buy A House And Travel
Communicating the benefits of buying versus renting to millennials is of paramount importance in influencing their decision to purchase a home. U.S. millennials total 66 million individuals and 24 million independent households, so these potential clients cannot be ignored.
As professionals in the financial and real estate spheres, ensuring that millennials are aware of these benefits can have a significant impact both on our bottom line and in making a difference in potential clients' financial future.
The statistics don't lie - 80% of millennials want to buy a home right now (source: Forbes). However, economic factors often delay millennials actually following through with this home buying.
Millennials are renting for a median of six years before buying, compared with a median of five years for renters in 1980. This underscores the fact that people not buying is a myth - the average time for renting has increased just one year since 1980.
"Many millennials believe they are unable to afford homes, when really many of them are unaware of the different financing options that exist."-CHRIS LING, MORTGAGE MANAGER AT NERDWALLET
Some ways we can communicate the importance of home buying to millennials:
- Discussing the potential objections with millennials, which include:
Insufficient credit score or history
Affording the down payment or closing costs
Insufficient income for monthly payments
Too much existing debt
- Encouraging millennials that a "starter home" is often a far better investment than renting for 6+ years.
You don't need to buy your "dream home" to be a homeowner - desirable and affordable options are available.
- Providing millennials with relevant financial knowledge
Arming millennials with knowledge of how to build their credit and better prepare for home buying through personalized workshops, newsletters, webinars, and more can help them realize that homebuying is not as far off as they once thought.
- Communicating to millennials that student loan debt doesn't deter homebuying:
Student debt has surged 56% in the last decade, but this does not show a statistical negative impact on millennial homeownership. According to NerdWallet's research, higher education has a positive effect on homeownership.
- Goal setting - it doesn't have to be "Either/Or"
According to CNBC, many millennials put off homebuying to travel; 47 percent of young people between the ages of 18 and 34 would rather spend their money on traveling than buying a house. However, as previously stated, 80% of millennials want to buy a home right now (source: Forbes). Better informing millennials about saving and financing options can help them realize that they can, in fact, both travel and own a home.