For years, real estate industry analysts bemoaned the apparent lack of interest Millennials had in home ownership. It seems Generation Y was merely biding its time! Millennials are now the dominant generation among all home buyers, according to a report by RISMedia. Here’s some highlights from the report!
As of January 2017, Millennial home buyers represented 84% of all closed mortgage loans. FHA loans were the most popular mortgage, accounting for 35% of all Millennial purchase loan activity.
Millennial home buyers are also coming to the table with good credit! Ellie Mae reports that the average Millennial FICO score is 724. When the credit score averages are broken down by mortgage type, the numbers are impressive:
- Millennial FHA borrowers had an average FICO score of 690.
- Millennials using conventional loans had an average FICO score of 748.
- Millennials using VA loans had an average FICO score of 734.
All of these credit score ranges are very respectable!
Millennial home buyers also appear to be staying within their financial means. Industry data shows that while Millennial home buyers had a national median annual income of $82,000, their median home sale price was $205,000.
The one piece of data we do not have from these reports is the average down payment amount. It would be easy to speculate that low down payments could be the driver for FHA mortgage popularity among Millennial buyers.
Still, Millennials who have low down payments are not limited to FHA mortgages; conventional mortgages allow down payments as low as 3%. What’s more, conventional mortgages permit the eventual removal of monthly mortgage insurance premiums, whereas FHA loans do not!
Naturally, this poses the question: are Millennial home buyers fully aware of their mortgage options? Or are they assuming FHA loans are “right” for them based on their down payment amount, first-time buyer status or credit score?
This is another reason why working with an Exclusive Buyer Broker is always a good idea! Not only will we refer you to trustworthy mortgage lenders who will explain your options, we also counsel our Buyer-Clients about the financial aspects of various mortgage types. If we think you can do better with a different mortgage, we’ll say so!
As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
