Just as we thought home buying was less desirable to the younger gen.... Don't rule them out yet. Home ownership is still a large part of the American dream! Unlike the generation before, they proceeding informed and with caution.
Although home prices are on the incline, it remains a better "bang for your buck, compared to renting.
Read more on this, from contributor of xoJane.com at Say Media, Zoe Eisenberg
Confidence in Homeownership is Up, Millennials Especially Enthusiastic
By Zoe Eisenberg
second quarter Consumer Outlook Survey just released by Prudential Real Estate, an HSF Affiliates LLC company, portrayed a particularly positive viewpoint of the housing market, with millennials at the forefront of the sanguine stats. A solid 80 percent of respondents between the ages of 25 and 34 said their perception of the housing market is “favorable” or “somewhat favorable”– a buoyant 9 percent increase from the Q1 study.
In addition, confidence in real estate and home values overall jumped sharply, reaching 83 percent, compared to the already rosy 77 percent in the Q1 study.
“If you start to think about millennials a bit, what’s important to them translates well to the context of housing–the sense of community, the need to feel connected,” says Earl Lee, chief executive officer of HSF Affiliates LLC and president of Prudential Real Estate. “With a home, you have that community, as well as a sense of security, a place to live and possibly bring up a family. These are all issues that are pretty dominant in their thought process. Prior to this survey, I didn’t think they were that focused on it, but obviously if you drill it down to what’s important, you can see why housing is a major aspect of what they view as the American dream.”
Among all respondents, 70 percent said that finding the right home and community is crucial to family happiness. Millennials were even more emphatic about the emotional side of homeownership: 93 percent favor a home for “more space for my family,” while only 75 perent view it as “financial security to borrow against.”
“It makes me happy to know millennials are favorable to real estate. It means that our country is in good hands as they all want to become homeowners,” says Lee.
While consumers may be confident, the survey also highlighted a bit of confusion over interest rates; although 65 percent of respondents said they watch rates closely, 43 percent of those who say they are monitoring them believe that rates are holding steady or falling, when in actuality, rates have risen this summer.
When it comes to securing a mortgage loan, consumer sentiment reflects that it is more challenging than ever, due to strict underwriting guidelines and credit-score requirements.
“Getting a loan is a rather sobering experience now,” says Lee. “The average buyer is already uncomfortable with the process, and the changing requirements make it much more difficult. Our survey indicates that people are frustrated by the process as it stands today.”
Of all respondents, 57 percent said securing a mortgage is more difficult than it ever was prior to the market crisis, nearly 40 percent said lenders are “overly cautious” when it comes to mortgage financing, and the main emotional challenge seems to be anxiety and fear of losing a real estate opportunity.
“Throughout this process, the biggest headache for consumers is losing an opportunity, and the fear of missing out,” says Kevin Ostler, senior communications manager for Prudential.. This fear of missing out, frequently called “FOMO” among millennials, rears up in many of the younger generation’s actions, from their social choices to their spending habits, so it’s no surprise that it would surface in their outlook on homeownership.
The knowledge gap, as well as scrupulous mortgage requirements, means it is even more pertinent that consumers receive advice and guidance from real estate professionals. Of survey respondents, 63 percent indicated that a good agent can help them make the right choices about the type of home and community they want, while 64 percent believe that having a trusted source of information and guidance is important—a 4 percent increase from Q1.
As the market continues to make a turnaround and consumers remain eager, it’s more important than ever for real estate professionals to make connections.
“Clearly, confidence is on the upswing at 83 percent and rising with every survey we do,” says Stephen Phillips, chief operating officer for HSF Affiliates LLC. “I think the important thing is channeling this confidence, and directing it toward the right opportunities. Confidence is a great thing, but if we go back to situations where people are shooting from the hip with their investments, that can lead to problems. It needs to be directed, and the best way for that to happen is for folks to work with real estate professionals.”
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