B4 • Friday, January 26, 2024
THE GARDEN ISLAND
thegardenisland.com
1 In 3 millennials delay home buying Desperate measures lead to disappointment Millennials have had to adjust to market condiMost millennials are prepared to take drastic meations, which hasn’t always yielded positive outcomes. sures to buy a home, with Although 35 percent of 65 percent saying they millennials fear making would pay up to a 10 permajor home repairs, they cent mortgage rate and 23 have embraced fixer-uppercent admitting they would buy at 15 percent or pers. Two-thirds of millenmore, according to a new nial buyers would study from Clever Real Espurchase a fixer-upper, but 18 percent of millennial tate. homeowners who bought A combination of high-inone regret it. terest rates, inflation, and Millennials’ idea of a fixstagnant wages are financially squeezing millennials, er-upper goes well beyond but it has not diminished a home that needs a new their enthusiasm for homecoat of paint. Two-thirds of millennials would buy a ownership. fixer-upper with asbestos, Clever’s survey of millenPETER MORGAN / ASSOCIATED PRESS 62 percent would buy a nial homebuyers found that home with mold, and 58 today’s real estate market is A sale pending sign is displayed in front of a home in Sudbury, Mass., on Saturpercent would buy a fixtough — and even more day, Dec. 2, 2023. challenging if you’re young. er-upper with a bad founquarter of millennials have dation. About 93 percent of millen- homes or holding off on of millennial home buyers less than $10,000 in savings, would consider an interest buying altogether. Half of Millennials are also open nials said the market has and 12 percent have less rate higher than the nato buying a home sight unimpacted their homebuying millennials said high interthan $1,000 saved. Addition- seen. About 85 percent of plans, and 76 percent are est rates are a barrier to tional average of about 7 concerned it will worsen be- homeownership. percent. ally, 5 percent have no sav- them would consider buyTwo-thirds of millennials Some young buyers fore they buy a home. ings at all. ing a home without ever regret not purchasing a would take additional Most millennials carry a touring it in person, but 13 Interest rates are an home when rates were bank-breaking measures to significant amount of debt, percent of millennial obstacle lower. It’s a regret that is get the keys to a house. For too. About 57 percent of homeowners who bought their dream home, 79 perRaising interest rates was not unique to their generamillennials have $10,000 in sight unseen regret their a strategic move to cool in- tion but especially poignant cent of millennials would debt, more than double the decision. Necessary compromises to buyers looking for starter pay above the asking price, 25 percent who have flation, and it has been ef$10,000 in savings. in home quality, financing, homes. including 11 percent who fective so far. The housing Their shaky financial or the buying process have would offer $100,000 or market has slowed, but milMillennials want to state has shaped their apleft many millennials with more above the asking lennials are starting to buy become homeowners at price. their first homes and feel proach to home buying. Al- remorse. A stunning 90 any price the effects. most half of millennials plan percent have regrets about High hopes, low bank their first home purchase, Despite obstacles to About 96 percent of milto put down less than the up from 82 percent in 2023. homeownership, many mil- balances traditional 20 percent on a lennials said high interest The most common regret Millennials’ desire for home, and 57 percent plan rates had affected their lennials are intent on buyis a bad location, followed homeownership remains to purchase a home that homebuying plans. As a re- ing, and their enthusiasm by bad neighbors and a strong, but their finances costs less than the median knows few limits. sult, they are looking at high-interest rate. U.S. price of $431,000. More than three-quarters have taken a beating. A smaller, less-expensive Hailey Rose McLaughlin WEALTH OF GEEKS
30-year mortgage rate rises to 6.69 percent, highest in six weeks ASSOCIATED PRESS LOS ANGELES — The average long-term U.S. mortgage rate climbed to a six-week high this week, pushing up borrowing costs for homebuyers already facing the challenges of rising housing prices and a shortage of homes for sale. The average rate on a 30-year mortgage rose to 6.69 percent from 6.6 percent last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.13 percent. As mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford. Rates have increased three out of four weeks this month. The latest uptick brings the average rate to its highest level since December 14, when it was 6.95 percent. Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, lifting the average rate to 5.96 percent from 5.76 percent last week. A year ago, it averaged 5.17 percent, Freddie Mac said. Home loan borrowing costs have been mostly easing since late last year, after the average rate on a 30-year mortgage climbed to 7.79 percent, the highest level since late 2000. As mortgage rates have come down, so have monthly payments on new home loans. The national median monthly payment listed on mortgage applications in December fell 3.8 percent from the previous month to $2,055, the Mortgage Bankers Association reported Thursday. Still, it was up 7.1 percent from December 2022. The overall pullback in mortgage rates since their recent peak loosely tracks the moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans. The yield has largely come down on hopes that inflation has cooled enough from its peak two summers ago for the Federal Reserve to begin cutting interest rates this year.
Agents can help millennials In a challenging market, even the smallest advantages can be the difference between a satisfying home purchase and a disastrous one. One of the easiest ways for millennial buyers to gain a meaningful edge is to choose an experienced agent to help them navigate the local market. “My advice to millennials who are looking to break into the housing market is to put together a road map and plan ahead,” says Adrian Alvarado, a California-based agent. “Millennials should explore options with a lender to see what assistance programs are available in their area that can help cover down payments or low down payments.” Alvarado also said savvy agents can help negotiate a purchase agreement in which the seller agrees to take some of the financial burden off the buyer. “A local Realtor may be able to get assistance with closing costs from sellers as well,” Alvarado explains. “Having local knowledge can make a huge difference. The longer a home has been on the market, the more open a seller might be to negotiating.” For millennial buyers wrestling with regrets, Alvarado recommends taking the long view and remembering where they live now won’t necessarily be where they live forever.