Is there a disconnect between the real estate world and millennials? Are they just unrealistic in their expectations? Do they assume the market will be ready for them when they are? Or is it us? Are we not approaching millennials with a plan that makes sense to them?
We have to know our target audience. Are we as agents so stuck in our ways that we can't find new approaches to new clients?
Too many millennials are wasting their money on a lifestyle they can't afford, and in turn, cannot save the money necessary for homeownership. Sure, there are programs out there that can help but unless we change our lifestyle, we can't change our situation.
Do millennials even want a house?
I think they do. At least some of them. And for those people, it's a numbers game to how much you can spend here and there while saving for a down payment, or at the very least, an earnest money deposit. According to 2017 Homebuyer Insights Report by Bank of America, millennials DO want to be homeowners but may not understand how hard it is to get there. In our day, we had a starter home and worked out way up. Today, first-time buyers want it all right out of the gate; granite counters, 3,000 square feet and a large lot.
We also assume that everything needs to be upgraded all the time. We constantly have a car payment because we need the newest car all the time. We constantly need the newest phone, the best whatever to keep up with everyone else. For one thing, that's exhausting and for another, it prevents us from saving the money we need for something we really do desire, like a house.
So what can millennials do? It's about getting creative. Most millennials will get an FHA loan with a 3.5% down payment to start with and may be refinance in a couple years to a conventional loan if they can. But by starting somewhere, they can build up the equity needed for loans or leverage later on. BUT it may mean cutting those 7 espressos a week down to 1 or 2.