Real Estate News

Debt-friendly home loans could appeal to new buyers, millennials

Published: 16 Mar 2017

Millennial buyers (typically those younger than 34) are often said to be weighed down by student debt. At the same time, the widespread amount of this debt could actually benefit the millennial buyer market in two ways: it could serve as a way to build credit, and it might also drive this demographic to certain programs, potentially shifting the focus for lenders as well.

A new DownPayment Resource report looked at recent homebuyer trends, noting the statistic from the Ellie Mae Millennial Tracker. As January saw more home mortgages for this group, the source said, a more general trend saw assistance programs for down payments grow in states across the country, including Massachusetts, Wisconsin and California.

For both millennials and new prospective buyers in general, state-based assistance could address any high initial fees and pave a way to sales within the market. Tennessee Housing Development Agency Executive Director Ralph Perrey spoke to DS News about his own state's efforts in this area.

"The idea here is that neighborhood stabilization requires more than investment; it requires the presence of an invested home owner," Perrey said. "This encourages people to buy and to stay and to help build up these neighborhoods."

When it predicted the 2017 trends most likely to change the housing market last November, the National Association of Realtors didn't just claim that millennials would help drive sales: it also forecast Midwestern cities, such as Columbus and Minneapolis, as key sites for these new purchases, with millennials reportedly are set to account for a third of overall purchases in 2017.

Help with meeting down payments could also fit into the NAR's other predictions, such as the relatively small amount of time it takes for homes to be sold, and a sales increase for bustling cities on the west coast.