Homes prices are rising in many parts of the country, competition is fierce, and Spring 2017 has been called the "strongest seller's market ever". We know this because, well, we have not exactly been living under a rock. But do we know how Millennial first-time homebuyers are coping with the red-hot market?
It seem the world has been waiting for Millennials to grow up. To be old enough to drive (and to spend $ billions on buying cars), to get jobs, to buy homes. This year, the oldest Millennials turned 36-years-old, and more than 6 in 10 Millennials have turned 26, putting them squarely in prime home-buying years.
First-time and experienced homebuyers alike are eligible to participate in the Mortgage +Plus program, offered by First Heritage Mortgage, which protects down payment funds in a homebuyer’s first three-to-seven years of their mortgage.
As seen in Mortgage Professional America
By Anna Sobrevinas
Home purchases in the Mid-Atlantic markets of Maryland, Virginia and North Carolina are seeing a boost, thanks to First Heritage Mortgage’s Mortgage +Plus, according to a news release. Mortgage +Plus, a down payment protection program, covers all FHA loan borrowers and is provided by First Heritage at no additional cost.
After an initial launch in January, First Heritage Mortgage’s new Mortgage +Plus℠ program is seeing significant growth heading into the Spring buying season. As the only mortgage company to offer loans with down payment protection in the Maryland, Virginia and North Carolina markets, First Heritage Mortgage remains focused on delivering positive, pro-homebuyer down payment protection solutions within its fast-paced mortgage service area.
Gen-Xers may not be as sensational – or visible – a generation compared to Millennials. They are certainly not as large in size. But consider this: Gen-Xer have disproportionate purchasing power, having earned 31% of total U.S. income last year at just 25% of its population. Gen-Xers are also the glue of the sandwich generation, most likely to be the key household decision-maker and fiscal influencer in a multi-generational household.
We have all read the headlines: Millennials feel pessimistic about their future; Millennials are the gloomy generation. But according to the latest quarterly Modern Homebuyer Survey by ValueInsured, Millennials reported to be rather upbeat, at least when it comes to their outlook on the American housing market and their prospects of achieving the American Dream.
This may be what the gold rush felt like, except it is now a rush to buy homes. We keep hearing housing demand is high, inventory is tight. Some headlines even describe homebuyers as "panicking" to rush to buy homes, or rushing to lock in low rates. Yes, if you have been paying attention to recent reports, you may have seen the word “rush” used frequently when describing today’s home buying activities.
Even in the current bullish housing climate, homeownership rate is still at historic low. For every homebuyer participating in a bidding war, there are more staying on the sidelines, concerned about buying too high, and waiting for the market to have a correction. Truth is, buying a home is historically an excellent investment; but the market goes up in peaks and valleys, not in a perfectly straight line pointing upward. Homebuyers always ask, “is this a good time to buy?”
In a housing industry that has had a history of being highly bank-centric especially prior to the housing crisis, consumers seem to increasingly understand their power, and are expecting lenders to earn their business. This shift in power balance is a healthy one for the industry – it empowers the consumers, giving them more options, and provides more incentives for lenders to further innovate in order to stay competitive.
First Heritage Mortgage today introduced Mortgage +Plus, an innovative mortgage product that protects a homebuyer’s down payment, available immediately on all applicable First Heritage mortgages. Mortgage +Plus will include +Plus down payment protection by ValueInsured embedded directly into elective buyers’ mortgages. With exclusivity in Washington, D.C., Maryland, Virginia and North Carolina, First Heritage Mortgage is the first mortgage lender to offer this protection to homebuyers in the region.
In 2016, American homeownership hit its lowest in five decades. The primary cause was attributed to Millennials – an age group that traditionally supplied a steady stream of first-time homebuyers – whose homeownership rate dropped to the lowest recorded at 34.1%. Well-documented explanations for this historically low rate include hefty student-loan debts, growing trend to “boomerang” back to parents’ homes, delay of marriage, increased career mobility, and other factors that delay homeownership.
However, Millennials have not lost their desire to own a home. According to ValueInsured’s Modern Homebuyer Survey, over 8 in 10 Millennials (83%) believed owning a home is an important part of their personal American Dream.
Americans are starting off 2017 feeling cautiously optimistic about the housing market, reports the latest ValueInsured Modern Homebuyer Survey. The first consumer confidence survey conducted in January and released post-inauguration reveals nearly seven-in-10 Americans (69 percent) believe 2017 will be a better year for the housing market than 2016, despite rising interest rates and a new administration.
In the housing business, we often hear about the challenges of “cold feet”. The catalyst could be a negative economic news headline, rumor about a friend who recently sold at a loss, or other personal circumstances and external influences.
ValueInsured’s recent Modern Homebuyer Survey indicates that most prospective first-time and upgrade homebuyers will buy sooner, if they could be given more confidence about the housing market, and about their odds of preserving their down payment savings. The survey interviewed 1,013 Americans who were interested in buying a home. Keep reading to see what they had to say!