Homeownership is the new American dream, at least according to Zillow and ValueInsured. In a recent survey, Zillow reported that over half of Millennials associate homeownership with the American Dream, which should make sense as people between the ages of 18 and 34 are waiting way longer to buy their first home than ever before.
Zillow Chief Economist Dr. Svenja Gudell told Curbed in August 2015 that first-time homebuyers in the 1970s rented an average of 2.6 years before buying their first home, but today's homebuyers rent an average of six years. ValueInsured, a company that provides down payment protection, reported that nine out of 10 Millennials do say it’s important to own their own home, but one-third of Millennial renters find it too risky and expensive.
While buying can be a stressful and even uncertain investment, it can be made easier by knowing some of the basics. Founder and CEO of ValueInsured Joseph Melendez spoke to Curbed about what homebuyers should know when buying their first home. See what tips he has to offer below:
1. Be committed.
In order to be committed and be confident, you should understand what mortgage tools are available.
Additionally, learn what type of mortgage is best for you, and find out if you are able to accept gifts from family. Then set a timeline so you're not caught in an endless cycle of always looking at homes and never settling down.
2. Understand the market that you're looking at.
Don't wait for homes to show up on listings to understand the neighborhood.
Do your homework, and understand the trends. Look at the sales data.
For more help, check out Fannie Mae and Freddie Mac. Also, be sure to check out Lending Tree and Bankrate.
"The difference today between a Millennial homebuyer and what I'll say my generation of homebuyer was that we're both going to live in a home for 30 years, except a Millennial is probably going to live in probably 10 homes over those 30 years."—Joseph Melendez, Founder and CEO of ValueInsured
3. Get with your lender and have that lender commitment in place.
By doing this, you will have a better chance at closing on the home.
4. The right real estate agent is always a referral.
Reach out to your friends and family for suggestions. It's always better than picking up the Yellow Pages.
5. Be sure to go through your credit report.
There may be mistakes. There may be discrepancies that are impacting your credit score. Double check for this.
Look at credit card and student loan debt, and figure out how to manage these issues. Get debt levels down. Then, you will be able to get a better loan.
• Millennials and Non-White Americans Most Likely to Associate Homeownership with the American Dream [Zillow]
• Flexibility and Control Fuel 'New American Dream' [ValueInsured]
• Today's First-Time Homebuyers Rent Longer, Marry Later [Curbed DC]