High End Homes & Millennial Buyers
For those of us (like me) who may not be able to read the font in the above graphic, I have reiterated the above statistics below:
- In 2018, 48% of all home buyers were 44 or younger.
- The median income of all first-time buyers is $75,000.
- Over half of all first-time buyers believe they need 10% or more for a down payment.
- 56% of first-time buyers delay purchasing a home because of student loan debt.
Many first-time buyers earn sizable incomes but are saddled with student loan debt. They believe they must either pay off a lot of their student loan debt or save for a sizable down payment or both before they can purchase a new home. But, while waiting, rates have gone up and home prices have gone up.
They key takeaway is that borrower education about reduced down payment programs and pre-approval requirements are critical to more people buying, even in the jumbo price points.
United Home Loans regularly closes 5% down jumbo loans (loan amounts that exceed $453,100) in the greater Chicago market at the same interest rate that is offered for loans with 20% down. Most Millennial homebuyers are simply not aware of this.
With a moderate amount of monthly debt, buyers in the following income ranges should qualify for the noted sales price (assuming good credit, etc.).
$100,000 to $110,000 – $500,000 sales price with 5% down
$120,000 to $130,000 – $575,000 sales price with 5% down
$140,000 to $150,000 – $650,000 sales price with 5% down
There are plenty of millennials renting who earn more than $100,000 per year. The more they know about lower down payments, the more they will understand that buying is way better than renting.
All you need to do is find them. 😆