A Millennials Perspective on Home Ownership
The benefit of home ownership is not something that‚Äôs taught in school. I graduated with a business degree and I didn‚Äôt hear one word from a professor in 4 years about what owning a home can do for me, where I can go to get a loan, how a mortgage is different than paying rent, nothing. I believe this is information that everyone who is just getting started in the working world should at least have on their radar. Whether you would be buying a home in 6 months or 6 years, it is important to begin to gain some knowledge about the process as early as possible.
To start, owning a home is one of the biggest determining factors between financial stability and financial instability. A study conducted by the Survey of Consumer Finances released in 2020 by the Federal Reserve found that the national average net worth of homeowners is $255,000 while the average net worth of renters is $6,300
This data shows that homeowners have a net worth over 44x higher than renters and one of the major reasons for this is pretty simple; homeowners pay their own mortgage, and renters pay someone else mortgage. When you pay a mortgage every month a percentage of that money is going back into your own pocket because you are buying your house back from the bank. Now I know that for many of the people reading this article this information might be common knowledge, but believe me, for people my age it isn‚Äôt.
I am not a mortgage professional so I cannot give any factual information or advice concerning how long you need to be employed to get a loan, what your monthly payments might be, or how expensive of a house you can buy. However, I can tell you that there are a lot of amazing programs out there for young first time home buyers and it is a shame not to take advantage of them. Every day people are buying homes with a 2.5% down payment or less. There are programs at banks and mortgage companies that allow for 1% and even 0% down. The bottom line is that you do not have to be rich to buy a home, which I believe is a common train of thought among my peers, you just have to be aware of the fact that it is possible and an incredibly smart thing to do to get ahead in life.
I am aware that information about the real estate market is not typically geared towards a younger demographic and that the people this article is written for may not see it. If you know someone who would want to read it or could benefit from this information, please pass it along. If anyone is interested in the home buying process or would like more information on good steps to take to get there, feel free to give me a call and I can point you in the right direction.