Having lived through Y2K, 9/11, two major wars, one major recession, and COVID-19, the world’s most financially cursed generation faces its next obstacle – an inventory collapse in the housing market. Yes, just when Millennials survived the most precarious job market in generations, there is precious little left to buy.
Even Millennials Make Mistakes
A recent study conducted on this distressed demographic finds that competition-induced factors forced their hands in home-buying decisions. This not only prompted split-second decisions but also put them in positions of regret.
In fact, one-in-four Millennials face financial remorse over their recent mortgage acquisitions.
The rash decisions and concessions stemming from inventory-induced competition take many forms. For example, 90 percent of Millennials said they’d be willing to buy a home sight unseen. Eighty-two percent are open to purchasing a fixer-upper in need of major repairs, and 80 percent said they’re willing to pay over asking price.
A Professional Take on Purchase Decisions
In a market that’s especially hard on Millennials, it’s difficult to decipher sound purchasing decisions from detrimental real estate deals. Thus, we reached out to home buying pros to get their guidance on navigating these tough times.
Kathleen Hays, Senior Loan Officer at Crosscountry Mortgage in Dallas, works with Millennials on a regular basis. Day in and day out, she sees the toll this market takes on this generation and offers her advice.
“Right now, I’d say it’s a good time to leverage assets like 401(k)s, investments, or savings if that’s what it takes to win a bid,” says Hays. “With this market, the return you’ll garner from a property purchase far exceeds what you’ll gain on the stock market. Millennials are in a good position to do this because they’re smart, savvy with money, and have a long way to retirement.”
This advice is especially indispensable since Millennials are in the toughest housing market.
“What used to be the $250K – $400K range is now more like the $350K – $500K range,” says Hays. “That’s where Millennials are competing and unfortunately there’s just so much competition and very limited inventory at those prices. You must get creative to win those bids.”
Ashley Broadhurst is an agent for Nest Partners Realty Group and dedicates a lot of time to this demographic. Her advice — leverage programs for greater purchasing power.
“At the Millennial price point, creativity is key,” says Broadhurst. “Thankfully there are a lot of first-time buyer and other programs out there such as Buy Before Your Sell, Power Buyer, and Knock which can put Millennials in a cash buyer position for a convenience fee of about 1.25 percent.”
