For prospective homebuyers, an onslaught of jargon paired with figuring out how to finance a new home can be overwhelming. Millennials, in particular, might experience more trouble considering that many properties may be out of their reach.
To provide some helpful insights, Porch surveyed over 1,000 millennials about their experiences before, during, and after purchasing their first home.
The Path to Homeownership
Many millennials may feel the pressure to purchase a home sooner rather than later. Homeownership is often advertised not only as a major life milestone but also as a testament to one’s maturity.
Keeping financially secure throughout the process should be more important than trying to race against an imaginary deadline.
Millennials who had yet to purchase a home believed they wouldn’t be ready to do so for another two-and-a-half years. Their hesitation seems fair, considering 44 percent said they weren’t on track to meet their homebuying goals.
For millennials who want to purchase a home with a significant other, the path to homeownership should likely start with a conversation about goals and expectations. Thirty-one percent of millennials said they wish they had talked to their significant other sooner when it came to homeownership. Men (41 percent) were more likely than women (22 percent) to wish they had brought it up sooner.
Making the Right Financial Decision
Everyone dreams about their perfect home. Some may even hop onto listing sites for opportunistic browsing. Daydreaming, however, may do more harm than good if it’s acted on. In fact, nearly one in five millennials admitted they’d searched for homes that were financially out of their reach.
So, what price range were they actually looking to stay in? The average listing price millennials said they would agree to for their first home was $230,239. Although there’s currently a strong job market and low-interest mortgages available, first-time homebuyers should still do their best to make a sound decision. More than one in four millennials ended up paying more than they expected for their first home: an average of $20,000 above the listing price.
Despite the financial hardships millennials presently face, many still remain hopeful. Nearly 20 percent of those surveyed admitted they still actively search for housing options despite being financially unable to own a home. Nearly a third of millennials also attended open houses for fun. The majority (77 percent) said they house hunt occasionally, even though they have no plans to buy.
While homebuying can be a little overwhelming, staying optimistic and setting realistic goals are simple steps first-time buyers can take to make sure they stay on track. With the purchasing process taking an average of about five months, there’s no need to rush into anything.
Are you a millennial? Are you shopping for a home? Are you an older homebuyer? What advice do you have for the younger generations?
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