by AL REX, Realtor
For many of us, it’s our children. With rising prices, how will they be able to afford a home?
We’ve heard of the millennials (ages 18 to 35), a young age group faces many unique challenges as it relates to real estate and homeownership. Of the 66 million millennials nationwide, approximately 730,000 live throughout San Diego County. They range from those just graduating high school to others who are climbing the corporate ladder and rapidly growing their income earning capabilities.
A major challenge facing this generation is their ability to partake in the “American Dream” of being a homeowner. Most specifically, rising home prices and rising debt. Starter home prices in Carlsbad have increased to about $650,000 for a detached single-family residence and $400,000 for a condo or townhome. Many millennials are also carrying with them a significant amount of college debt, which is the second highest debt category in the U.S. behind home mortgages – with a dollar amount that has doubled in size over just the last seven years.
So what are the solutions or opportunities, and do they exist? As many of us know, record low interest rates can still make homeownership affordable. For the moment, this still benefits all homebuyers. What about saving for a down payment? Most lenders will allow monetary gifts from parents or relatives to be used for a down payment, and many mortgage brokers are getting creative with lower money-down loans with affordable mortgage insurance, to make homeownership a real possibility. On a separate note, there is a HUGE opportunity for home-builders to start creating more of a starter home inventory for this population. As soon as they realize the market potential for this generation of 730,000 in our county, we would expect to see more affordable homes hitting our market.
Do you have a millennial in your family and are concerned with their ability to afford a home in the future? I’m big on education and am pleased to lend my services for free, to educate our young adults on homeownership and the important items they need to know when buying and owning a home. I’d be happy to sit down with you to provide education and create a plan to help young adults become homeowners in the future.
Give me a call or send me an email.