An All Time Low For First-Time Home Buyers

An All Time Low For First-Time Home Buyers

2015 marks an all-time low percentage of first-time home buyers. According to cnbc.com first-time home buyers made up only 32% of sales, the lowest in over three decades. So what’s causing such a substantial decrease in buyers? In what many would argue, a favorable market, why is the homeownership rate in the US the lowest it’s been in 50 years at 63.4%?  The general consensus as to why there is a lack in first-time home buyers is millennial debt, much of this debt acquired by the younger generation comes from student loans. While there’s an increase in the desire for a higher education, it is also more commonly a requirement in the workplace. Now, in the application process, most companies don’t just “prefer” a bachelor’s degree but require one. In turn, the millennial age is continuing on to higher levels of education but also higher levels of debt in order to find a stable career. Student debt is preventing people from being able to save for a down payment. Instead of setting aside a couple hundred dollars a month, in hopes of owning a home some day, they’re paying hundreds a month on paying back their loans. Furthermore, what’s holding back the millennial age from purchasing a home is the significant increase in rent. The Wall Street reported that most people are paying rents that are 40% of their gross monthly income, leaving little to be saved. An ideal percentage of a monthly income dedicated to housing would be 25% to a maximum of 30%. This increase in rents nationwide is a classic cause and effect case. While employment...