Millennials Entering the Condo Market
A large portion of the population in the condo sections of the Hoboken/Jersey City area is made up of the “millennials” or, if you prefer, Generation Y’ers. They reached adult at, or around, the turn of the century/millennium.
The millennials grew up in a period of explosively advancing technology. By the time they obtained the latest techno-toy, it was already being surpassed by something new and more versatile. It was also a time of virtually unlimited choices in everything from food, to entertainment, to transportation. It stands to reason that they may be just a bit demanding in the housing arena.
Many of the millennials have delayed the purchase of their first home for a variety of reasons. One big factor is that a lot of them are burdened with unprecedented student loan debt. This has become the second largest area of consumer debt in the United States, following only home mortgage debt. However, it is only a delaying factor, not a prevention factor. By the time they are 35 years old, the average for homeownership is back up to the overall average.
Some factors are coming together that may bring the Gen Y’ers into the housing market earlier than many expected. For one thing, rents are beginning to rise precipitously. The millennials are smart enough to be unhappy with paying all that money without accruing any equity.
The housing market has stabilized very nicely. This, coupled with interest rates that are reaching almost historic lows, is enticing many who would normally put off homeownership into the market. It may be a seller’s market for the next year or two because of these factors.
The Federal Housing Administration, along with Fannie Mae and Freddie Mac, have improved the rules for first-time buyers recently. The FHA’s insurance rates have been cut. Freddie and Fannie have lowered their down payment requirements from 5% to 3%. This, together with the rising rent rates, will play a large role in the entry of millennials into the housing market, and that bodes well for places like Harborside Lofts.
Where would you like to purchase your first condo?
Edward