These days, a lot of talk about the housing industry as a whole centers around the impact millennials are going to have on it. While most young adults in this age group are not yet homeowners, plenty of studies and surveys have shown that this is a goal many of them carry even after years of economic hardship brought on by the recession. However, one area of disconnect they may have is that those in Generation Y generally want to live urban lifestyles, but buying homes in major cities can be an expensive proposition.
The question, then, is what these eager young buyers might be able to do to potentially bridge that gap between their own financial realities (that is, most young adults probably don't have enough in savings to buy homes that cost well above the national median) and those of the markets in which they might be most eager to shop. And the good news is that while some dreams of homeownership here may be unattainable, there is still likely to be plenty of options available.
Taking the first step
One of the biggest issues here, obviously, is the fact that so many young Americans are probably not too confident in their finances following all the difficulties they likely had soon after college. But if they can build up the funds necessary to make a decent-sized down payment – many lenders still require 20 percent, but some are getting more flexible – and also keep paying what are likely to be high rents, then buying a home might actually save them money in the short term. Making the decision to buy and being able to do so with relative comfort is often seen as a pretty good sign that they're ready, even if it seems scary.
This is also an issue related to credit standing, though. The fact is that for a lot of lenders, standards are still tight, and young borrowers will have to have a long, demonstrated history of paying all their bills and keeping their debts down. Again, those who are in a position to buy a home at this point are probably in pretty good shape here as well, but checking under the hood and seeing if there are any credit improvements to be made before taking the leap is a good move.
Have to be patient
However, because of the cost of making a purchase – even buying a condo – in many major cities, young people should also try to accept that they probably aren't going to be able to afford their dream home. Keeping things realistic, and building up to a point at which they might be able to better afford the things they really want in a home is often a good idea. There's a reason that some options in the market are often referred to as a "starter home."
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