As I previous wrote about, it appears that a lof of young adults are saddled with high debt loads after graduating from college, or graduating from college and being under employed so they really can’t pay off their loans. We do know that this is a proven segment of society out there who is facing just this. Now what about the people that may have this situation, but are instead Skipping Starter Homes altogether with the fact that they would rather save their money and get in a better financial standing before putting their root down and buying a home.
Bank of America recently had a study done where they were looking at this exact logic and were trying to figure out exactly which way young adults were migrating towards. In this study, it was found that seventy-five percent of first-time home buyers would be interested in Skipping Starter Homes with the end result being they would either wait for their dream home or a home they know they can grow old in. As another part of this survey, it was found out that nearly two-thirds of those surveyed felt that the feeling was they couldn’t afford the type of home they want and would wind up settling instead of being somewhere they enjoyed.
What could be leading the younger generation into Skipping Starter Homes? One of the reasons could be the fact that a lot of the younger buyers are actually looking for houses that are substantially larger than in the past. The old assumption used to be that the recent college graduates were looking for condos in the city, but these days they might be looking for 3-4 bedroom, single-family detached homes which is an opposite to common assumptions. The older generation used to purchase the smaller starter homes and move when their family and situations demanded it. Maybe we are witnessing a changing of the guard so to speak and the housing market is going to need to adjust itself and how we analyze the historical data of the last 20-50 years.
Another reason people could be Skipping Starter Homes is the fact that there just isn’t as high of an inventory as there has been in past years. If you think about the average starter home being in the $175,000-$225,000 range, I put it into a real estate website and I was shocked to find that in a lot of metro areas, there just aren’t a lot of inventory out there and a lot of the inventory I found were either short sales or foreclosures. The problem with these homes for sale is while conventional home buyers are waiting to go through approvals, investors are coming in with cash offers and snatching these homes up rather quickly. Now what they are doing is either flipping them after a remodel for profit and a higher price, or they are probably renting them out. If you budget is for home ownership and a starter home, the investors are taking away options for you definitely.
As you can see, young adults and recent college graduates have a lot on their plates right now and it appears that Skipping Starter Homes is definitely an option they are going with. As this turns the real estate market upside down, it is definitely something to keep track of. If you are a first-time home buyer, please feel free to reach out and I can help you get approved or we can develop a plan for when the time is right. You can reach me at 888-900-1020, email at email@example.com, or visit my website at www.loanconsultants.org.