Pursuing your dream of homeownership? Here's what you should know.
For young adults, it's common to think about long-term goals and priorities. And if homeownership ranks high on your goal sheet, you’re in good company. Many of your peers are also pursuing their dream of owning a home. The 2022 Millennial & Gen Z Borrower Sentiment Report from Maxwell says:
“Many young adults have demonstrated their resolve to embark on the journey toward homeownership soon. More than half of millennials and Gen Zs plan to apply for a mortgage sometime within the next year.”
So many young people aspire to own a home, but what exactly goes into making that happen? Let's explore the concept and help you better understand what you need to do to achieve your homeownership goals.
Top Motivators To Buy a Home
It is helpful to know why homeownership is important to you before beginning the homebuying process. The survey mentioned earlier shines a spotlight on some of the primary reasons why younger generations are seeking to purchase a home. It finds:
- 95% believe the cost of renting is too high
- 35% think owing a home is an important wealth building tool
- 16% seek the sense of security owning a home provides
- 37% plan to use it as an investment property
There are plenty of financial and non-financial reasons to buy a home that go beyond simply resonating with you. While your number one motivation may be different than what drives your friends, they're all just as valid and worth considering.
Key Obstacles and How To Overcome Them
Whether your homeownership goals come from the heart or are driven by financial aspirations (or both), it can still be hard to know where to start when you’re looking to buy a home. From understanding the homebuying process to getting pre-approved and exploring down payment options, there’s a lot to wrap your head around.
The same Maxwell survey also reveals key challenges for potential buyers. Thankfully, the knowledge and guidance of a trusted real estate professional can help you overcome both. Here’s a look at two of the hurdles potential homebuyers say they face:
1. The Mortgage Process Can Be Intimidating
In the Maxwell study, 33.37% said one of their obstacles was that the mortgage process is confusing or difficult to understand.
“There is a general lack of knowledge about home financing. Mortgages are a complicated topic with no one-size-fits-all answer. It’s difficult to understand the space, let alone determine what the right course of action is based on your unique financial picture.”
When you need to know the answer to a question, it can be tempting to turn to the internet. However, this might not give you all of the information that you require in order to understand everything completely. Financial advice is one area where you want to make sure you're talking to a true expert. By working with reliable experts, you can get the guidance needed to achieve your homeownership goals. With an expert, you'll receive targeted advice related to your specific situation—not generic information like what is commonly found online.
2. It’s Hard To Know How Much You Need To Save
In the Maxwell study, 45.75% believed they didn’t have enough saved to cover their down payment or closing costs.
What you may not realize is that, today, there are a growing number of down payment assistance programs available nationwide to help relieve this pressure. A report from Down Payment Resource says:
“Our Q3 2022 HPI report revealed a 1.6% uptick in the number of homebuyer assistance programs available to help people finance homes, raising the number of programs to 2,309, a net increase of 36 over the previous quarter.”
Additionally, as the housing market cools, buyers are regaining some negotiation power and more sellers are willing to work with buyers to help with closing costs. Understanding what’s out there and the options available may help you achieve your dream of homeownership faster than you thought possible.
If you’re serious about becoming a homeowner, know that it may be more within your reach than you think. Lean on trusted professionals to help you overcome challenges and prioritize your next steps.