There are quite a few falsehoods being purveyed about millennial homebuyers, with ‘experts' and armchair statisticians alike purporting to know why this generation is hesitant to buy homes. However, millennials are one of the fastest growing generation of home buyers—far outpacing baby boomers. Here's another dose of reality that debunks three of the most common millennial Lynx Ridge home buying myths.
Myth: Millennials Hold Too Much Student Loan Debt for Home Buying
The fact is that it's true that about 40 percent of millennials are graduating from college with hefty student loan debt, but this isn't necessarily a barrier to homeownership. While student loan debt indeed counts when calculating an applicant's debt-to-income ratio and has the potential to lower the debtor's buying power, it does not necessarily have to. In fact, many mortgage lenders will look to potential borrower's existing credit scores and income level just as seriously as they investigate current loans and debts. This means that limited amounts of debt don't have much effect on millennial home buying trends.
Myth: Millennials Simply Are Not Interested In Home Buying
It's true that the rates of homeownership in recent years as dropped across Canada as a whole, but this trend is within every age demographic group. This myth is not backed by any evidence that millennials are any less interested in buying a new home than their predecessors. One must remember that the housing crisis in 2007-08 instilled a bit of hesitancy into young people, which may be a large factor in this generation's willingness to wait a bit longer to invest in a home.
Myth: Millennials are Worried About the 20 Percent Down Payment
Well, in reality that's likely a concern of any potential homebuyer, not just millennials. However, regardless of age, there are home lending and mortgage programs available to qualified buyers that call for far less than a traditional 20 percent down payment. Some conventional loan programs only call for a 3-6 percent down payment, and loans such as those through the Fair Housing Administration typically begin at 3.5 percent. Those who qualify for USDA or VA home loans may actually secure a zero-down mortgage in certain situations.
If you are considering buying a home in the near future, be sure to reach out to a local real estate professional within the vicinity of where you plan to relocate.