Millennials’ statistics show they have low rates of homeownership. Despite the generation entering the market in 2008, where most previous generations were buying homes, there has been a significant decline. One of the significant contributions could be due to the year’s recession, making it difficult for people to enter the workforce. The non-profit down payment resource and Freddie Mac says other barriers could bring the situation.
A statistic done by Freddie Mac shows that at least 46 million millennials can apply for a mortgage, and yet they have not pursued the goal. Compared to other generations of the same age, millennials are less likely to own homes despite their ability and home availability. Things are the way they are because delayed marriages and other structural barriers hinder the millennials from entering the housing market.
Other barriers to homeownership
The mortgage market needs one to save for a sizeable down payment. Research by polling showed that 68% of correspondents that were not homeowners reported not having a downpayment prevented them from purchasing a home. Downpayment is the biggest hindrance to homeownership. It has also been reported that most downpayment is overestimated, and very few individuals know about the low downpayment programs.
Lack of knowledge about down payment keeps people from owning a home as they assume they lack enough money due to overstatement. Knowledge about low-down-payment mortgages and down payment assistance can make more people become homeowners.
Credit scores and credit history are significant factors when purchasing a home. Lending institutions are increasing their credit box as the debt-to-income ratio is rising. Accessing credit remains to be a tight deal, nevertheless.
Thin credit file
A thin credit file is another reason why some millennials are not ready to own a house. It is difficult for agencies to access their credit since they don’t have a history of using them.
How can these barriers be removed?
If people were taught the skills to do their research and find financial information for themselves, it would be easy to find their financial confidence. Finding objective information helps to answer any arising questions they may have.
Since millennials fail to access financial tools and situations availed to them, they find financial counseling outside their formal education. Situation housing counselors in various locations to help this group understand programs availed to them can help. Housing counselors should reach out to people before asking for help. This effort will help them find house counseling people as they think about their housing goals. Life transition points are targets housing counselors should look for to allow people access to housing needs by giving them information about the industry’s available programs and tools.
Many programs support people to become homeowners, although they are not widely known. These programs handle barriers such as low credit scores high down payment. More research is needed to help millennials understand homeownership through the provided programs to achieve their goals.