How Millennials Are Affecting Home Buying

  • By Jeremy Thompson
  • 15 Mar, 2016
Are millennials buying homes or are they instead staying in their parents’ home and living up to their reputation of being entitled, lazy and addicted to social media? The answer may not be so simple. How Did Millennials Get That Bad Rap? First off, let’s give millennials a fair shot and understand why they may have gotten […] The post How Millennials Are Affecting Home Buying appeared first on J. Thompson Builders.

How Did Millennials Get That Bad Rap?

First off, let’s give millennials a fair shot and understand why they may have gotten a bad rap. In a CNBC article titled Why Do Millennials Get Such a Bad Rap at Work? , Lindsey Pollack, consultant and author of Becoming the Boss: New Rules for the Next Generation of Leaders explains the negative labels are often the results of misperceptions. For example, when it comes to laziness Pollack says the laziness label “may simply be a reflection of millennials’ comfort level with technology. Having grown up with Google and GPS-enabled smartphones, they’re used to finding the answers with just a few clicks.” Because of this millennials are going to the take the “quickest, easiest route.” It’s not that they don’t want to work hard, “they just want to know why they are in their role and what the larger goal is,” says Pollak.

More Millennials Living at Home

Now that we have our misperceptions of this generation out of the way, let’s talk about their home buying trends. A 2015 Forbes article titled More Millennials Living At Home Than Ever Before shows more of them are living at home than five years ago regardless of the economic recovery, based on a report by the Pew Research Center . The national unemployment rate for millennials was at 12.4% in 2010 and declined to 7.7% percent in 2015, yet millennials are still choosing to live at home. Why?
Again, it may not be as simple as to label millennials as lazy. Millennials actually have “more debt, a higher cost of living and stagnant relative wages,” says Luke Delorme, Research Fellow at the American Institute for Economic Research. Delorme backs up this fact by explaining that student loan debt was at about $509 billion in 2006, and increased to about $1,360 billion in 2015, an increase of 167%.
Richard Fry, a Senior Researcher at Pew Research Center, agrees that the higher cost of living and student debt factor into the lack of millennials buying homes, but the article also points out the lack of home buying could be related to changing attitudes. Fry, as well as a millennial profiled in the article, point out millennials (and probably their parents) are more accepting of the living arrangements and more mindful that it’s wise to pay down debt first, establish a solid financial footing and get ahead before jumping into a home purchase.

Yet the Data May Not Be So Simple

Millennials still comprise 68% of all first-time buyers, according to a NAR 2015 Home Buyer and Seller Generational Trends report . Millennials appear to be most attracted to markets that are growing, yet affordable. Des Moines, Iowa ranks as #1 with 59% of millennials representing the shares of purchased mortgages, according to Realtor.com. Other cities that made the top ten list of millennials purchasing the most mortgages include cities in Utah, Michigan, Wisconsin, Louisiana (several cities), Pennsylvania and Tennessee. You can see the full list here .
The take away:Millennials are still buying, yet they represent buyers who are truly ready to buy and able to handle the expenses as opposed to not being able to come up with the down payment or having to foreclose on the home.
Next Steps

J. Thompson Builders Blog

By 7052540976 15 Nov, 2017
Some of these considerations may not be in the forefront of your mind, but there is a long list of aspects you need to consider when building a new home. These should help to get you started thinking about some of the most important pieces of the home building process.
By 7052540976 15 Oct, 2017
This home is being built with our client’s specific wants and needs in mind. The homeowner
requested a single family home with a modern contemporary house design. Previously, he lived
in a townhome and desired a more private, spacious residence. A main floor living with a large
space to entertain and big volume ceilings were a must on the client’s list.

The client decided building as opposed to finding a pre-existing home was a better solution for
him because he wants something specific to his needs. He already had the perfect location in
mind and it was time for him to own his dream home.

The area is ideal for this client because it allows him to live in close proximity to his hobbies and
interests and it also allows him the ability to walk to nearby restaurants or bike to the
surrounding shops. This homeowner will be close to everything. He truly loves the location!
The design concept picked is pictured below. In sticking with a contemporary influence, the
design has clean, simple lines that will result in an extraordinary modern home. We combined
elements of residential and commercial materials and design to bring our client’s unique requests to life.
By 7052540976 15 Sep, 2017

You decide that you are ready to build a custom home for you and your family. Now it is time to figure out how to finance your dreams!

Let’s start with the basics. As with any loan process, do your research. Talk to several mortgage companies that specialize or have a strong understanding/history of working with construction loans. Ask questions and voice your concerns. Companies of course want your business, but they also want to make sure they are a good fit for you and what you are wanting to accomplish. Reviews and referrals are strongly regarded these days. They want to make sure you have the best experience possible.

There are several main differences between a construction loan and a regular existing home loan. An individual construction loan may require a longer credit history  or a higher credit score as well as more money down and along the way. It is more of a process, but it is most certainly worth it. With the right builder, the more involved process becomes a piece of cake; but, that is an article for another time.

Home loans can have a 30 year term whereas a construction loan typically has a max of 1 year. “The rates on this type of loan are higher than rates on permanent mortgage loans. To gain approval, the lender will need to see a construction timetable, detailed plans and a realistic budget, sometimes called the “story” behind the loan,” as reported by  bankrate . While your home is being built, it is typical to make interest-only payments. 

If you are thinking, “I don’t have enough money to pay off a newly built home in 1 year!” Don’t panic.

A popular option is the construction-to- permanent financing sometimes called “one-time close,” a “single close,” or an "all-in-one" loan. Upon completion of construction, the remaining loan balance is converted into a permanent mortgage with terms up to 30 years. Like most loans, “the rate and other terms of the permanent mortgage are set up-front when the entire loan package is closed” according to the  National Association of Home Builders .  Construction/permanent loans are offered by many different lenders, including banks and mortgage companies and are a great option for those of us wanting to finance their home purchase over an extended period of time.

Another option is a stand-alone construction loan. This type of loan can be beneficial if you currently own your home and want a smaller down payment option.   Read more about stand alone construction loans.

There are many different loan options. What makes sense for one person doesn’t make sense for everyone. Make sure you find the right product for you and your particular project. If you want to talk over some options, contact us! We would love to hear your ideas and figure out how we can build your dream home.

View our work , read our reviews on Houzz.com , and visit our Facebook page to get inspired!
By Jeremy Thompson 01 Aug, 2017
Your home should work for you, your family and the way you live. Sometimes a new custom home isn’t the answer yet. When you need to maximize the space in your current home, find clever ways to make your space more usable by maximizing storage in unique ways. Platforms add additional space and a new […] The post Clever Remodeling Ideas to Maximize Storage Space appeared first on J. Thompson Builders.
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The internet puts an incredible amount of information at your fingertips. Why would you not take advantage of it to get home remodeling advice? Often it isn’t created by experts in the field. Here are 3 remodeling myths you may have read or heard about and the truth you need to know to understand how […] The post 3 Remodeling Myths and Tips appeared first on J. Thompson Builders.
By Jeremy Thompson 01 Jul, 2017
With more and more people working from home or taking at least the occasional “work from home” day, the home office has become an essential part of a home plan. Even if you don’t work from home ever, the home office is still a great area to work on creative projects, store important files, or […] The post Designing a Home Office: Increasing Productivity, Inspiring Creativity appeared first on J. Thompson Builders.
By Jeremy Thompson 15 Jun, 2017
We’ve offered you lots of advice over the years about building a custom home. Here is a condensed version of some of the most important tips to follow. Get on the fast track to planning your new custom home! 7 Tips for Building a Custom Home Pay attention to your subdivision covenants. Yes, these are […] The post Building a Custom Home: 7 Quick Tips appeared first on J. Thompson Builders.
By Jeremy Thompson 01 Jun, 2017
Whether building a house or undertaking a remodel you have the opportunity to design your house to suit your tastes and needs. There are many flooring options available, each with unique characteristics and design. Since flooring is a long-lasting part of the house it is important to choose the right floor for each room that […] The post 5 High-Quality Flooring Options Available for Your Home appeared first on J. Thompson Builders.
By Jeremy Thompson 15 May, 2017
Building a new home is an exciting time, filled with anticipation and satisfaction as you watch your vision come to life. However, it can also be a little overwhelming when you’re unfamiliar with some of the technical terms. To help remedy this we’ve defined a few of the custom home building terms you may hear […] The post 5 Key Terms to Understand in Custom Home Building appeared first on J. Thompson Builders.
By Jeremy Thompson 01 May, 2017
Whether you’ve just unpacked your first box or you’ve been living in your house for years, chances are there’s something about your home you’ve desired improving. However, before beginning a project there are a few key home remodeling terms you should become familiar with. Understanding these terms will help you navigate conversations with your remodeling […] The post 6 Key Home Remodeling Terms to Understand Before Beginning a Project appeared first on J. Thompson Builders.
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