Though winter is often known for being the real estate “off” season, it can also be a better time to buy! The inventory is a bit more constricted but there are typically fewer house hunters. Also, prices tend to dip a bit in the winter months; which means you may nab that dream home with a bit less stress. So, what to do once you’re ready to start looking this winter?
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What are the hottest cities for Millennials to buy homes in for 2016? A recent Realtor.com article outlines, "Where's Hot - and Where's Not - For Home-Buying Millennials" in the coming year. As Yuqing Pan writes millennials are making their presence known in the housing market: "numbering 43.5 million, the older group of millennials (aged 25 to 34) makes up 13.6% of the U.S. population but fully 30% of the current population of existing-home buyers."
Rather than try to move to "trendy" cities with high price tags such as New York City and Los Angeles, "young home buyers are increasingly turning to cities that are relatively affordable and have lots of jobs and maybe even a trendy atmosphere all their own." And one of those more affordable cities for 2016 is likely to be Seattle.
With a median listing price of $398,000 and a 14.9% population share of older millennials, Realtor.com places Seattle 7th on their list of 10 cities, writing that "the headquarters of Microsoft, amazon, and many other tech companies large and small" mean that there has been "an influx of educated, young tech workers, which contributes to its uniquely cool culture." And of course, don't forget about Starbucks of course!
In a recent letter to millennials, Jonathan Smoke of Realtor.com describes the biggest obstacles preventing millennials from homeownership. He nailed down four factors that are giving millennials the most cause for concern:
- Student Loan Debt - This can cause problems when trying to secure a mortgage, because "in order to get a qualified mortgage, you need a DTI of no more than 43%, so a very large student loan balance could disqualify you right off the bat."
- Credit Score - Given that history is one of the largest factors in determining credit scores, caution is necessary because "the average FICO score for a millennial with a mortgage this year is 714" whereas the average score of an American is 695.
- Down Payment - While having that 20% down payment is ideal, "the average millennial this year could only put 7% down." Smoke suggests aiming for a 10% down payment and saving as much as possible.
- Rents Are Rising - Many millennials are concerned with rents that keep rising faster than incomes: "the majority of renters in the U.S. now have to spend more than 30% of their income to rent a typical home, and that means they're starting to sacrifice spending in other areas such as food and health care."