The National Association of Realtors had it right when they stated that some metropolitan areas in the Midwest including Grand Rapids are going to see an increase in home buying from the millennial generation. In fact, according to realtor.com, 46% of the mortgages written in Grand Rapids were from ages 25 to 34. Since this past summer, despite record low inventories of homes, the real estate market in GR has seen sales soar. With the combination of an increase in employment and home prices becoming more affordable, the millennial buyers are making a move. They are also seeing the increase in rental rates from last spring and mortgage interest rates continue to stay at a historical low. Why would they want to pay for the high rental rates when they could spend about the same or less to own their own home?
Looking back, the Millennial generation went into the job market during one of the largest recessions which made them have to work hard to establish their own credit and save up for their own down payment. Many Millennials are just starting to look for their first home while others are realizing they have to save more for a down payment, cannot find a house that meets their needs within their budget, or have not decided on a specific neighborhood. This means that the millennial buyers will continue to drive the increase in first home buyers. Jonathan Smoke, from Realtor.com, estimates that half of all home sales activity for the first half of the year can be attributed to first-time buyers and according to the NAR 2015 Home Buyer and Seller Generational Trends report, Millennials comprise 68 percent of all first-time buyers.
The Grand Rapids housing market stays on top for having affordable housing with top ranked schools, low crime rates, and an overall low cost of living. Millennials are looking for this as they get married and start to raise a family or continue to live large with owning their own condo or house. Many expenses come with raising a family so Grand Rapids is an attractive option for new home buyers and couples looking to start a family.
Here are some tips from our friends at Zillow to help making your new house purchase feel right:
- Don’t assume you can’t afford it. There are different loan options out there that will fit your needs and qualifying first time home buyers can put as little as 5% down.
- Don’t do it alone. While it’s easy to search online for houses, agents know the market like no one else and have been in hundreds of homes. An agent can keep you on track and help you stay away from any red flags.
- Ask your parents for advice. They have most likely been where you are now and can add value to your home search including financial options.
- Take your time. Make sure to do your research, visit houses and open houses to become comfortable with what you like and want in a home. Don’t be rushed. It’s a much larger, personal and emotional expense that should not be taken lightly.
- Don’t be overwhelmed by data. There is a lot of information out there and the idea is not to have it stall you or question whether or not you should become a home owner. Just make sure you are ready and you feel good about the tips above.