The real estate market has been a wild ride and has made a major impact on millennial homebuying trends. Left and right, we saw people buying and selling property like never before because everyone was benefitting. Buyers had low interest rates so they could get more house for their money. Sellers didn’t have to worry about spending a lot of time on the market because offers were coming in as soon as the listing went live.
Although the market seemed to have something for everyone, millennials were faced with some pretty tight competition. They were willing to take risks like foregoing typical contingencies like having a home appraisal or home inspection. They were willing to buy a home sight unseen. They were even willing to submit offers above asking price.
Now that interest rates are rising and the competition is starting to die down, what can we expect from millennial homebuyers in 2022? Let’s take a look.
Millennials aren’t buying when they wanted to
The millennial homebuyer may have had a plan about when they’d buy their first home, but those plans are out the window for today’s homebuyers. Half of millennials say they’re buying earlier are motivated for financial reasons. Despite home prices being so high, millennials feel like they need to act now before things get even worse.
On the other side, there are a group of millennials who are putting a hold on their plans because rates are so high. It’s a tough spot to be in.
Millennials are still willing to buy sight unseen
Despite rising interest rates and high asking prices, the market is still very competitive. Some millennials are so eager to secure a home, they’re willing to buy a house sight unseen – if under the right circumstances.
What are some of those “right circumstances?” They are:
- The home had a great price
- The home was newly built without previous owners
- Sellers offered to pay closing costs, waive inspection fees, or offer repair credits
- The market was highly competitive
- They’re able to secure a low interest rate
View mortgage rates for
December 2, 2022
View mortgage rates for December 2, 2022
Millennials open to offering $100,000 more for their dream home
In almost any other market, you’d think that a homebuyer would submit offers at or below asking price in an effort to save money. Yet, millennial buyers are willing to submit offers $100,000 over asking if it meant they’d secure their dream home.
That’s an insane amount of money!
Millennials will take on fixer-uppers – 25% will regret it
With there being such a short supply of homes available for sale, millennials are willing to buy fixer-uppers – some that even required extensive repairs. Even though buying a fixer-upper can be a good investment, they can be a lot more of a hassle than their worth. Unfortunately, 25% of millennials who do purchase a fixer-upper will regret it.
Millennial first-time homebuyers are entering a market whose future is still uncertain. Will the inflated home prices correct themselves if there’s a crash or a recession? Who knows… Only time will tell.
The Bottom Line: Do you resonate with any of these millennial homebuying trends?
If you’re thinking about or in the process of buying a home, the mortgage experts at JVM Lending can help walk you through down payment options, monthly payment scenarios, customized rate quotes, and more. We’re here to be your dedicated mortgage resource.
Ready to take the next step toward buying your home? Getting pre-approved is the first step to determining what you can afford to buy. We can get started on your pre-approval today! You can also give us a call at (855) 855-4491.