According to their information the share of homebuyers in the Millennial age group of 30 to 35 years old has been steadily increasing since 2011. The percent of these homebuyers rose from 14.5% in 2011 to 14.7% in 2012, 15.4% in 2013 and 15.8% last year in 2014.
This coupled with a relatively steady median age of all homebuyers (Median Age) is good news for the housing and mortgage markets. With the Millennials now getting to the age when most people buy homes, rates still at historically low levels and reasonable home prices and availability, things may be looking up for housing. The question is, what effect might a December rate hike have on this trend?
The challenge lies in the growth of the economy needed to support the wage and employment growth to provide consumers with the confidence and the money to continue to pursue the American Dream. I ain’t buying that this Dream is dead. It’s alive and well and living in every part of our nation, at every level, regardless of race, color or religion. People want to set down roots and own a home. I say, let’s help them do it.
So, banks and Independent Mortgage lenders need to be ready to continue what they do best; lend money to qualified consumers to buy homes. That keeps the engine running. The key is in the quality of the product created and in controlling the cost to do so. The increased use of technology will help.
Systems to identify and correct loan defects will pay big dividends in reducing the time, effort and expense in manufacturing loans. These loans can then be sold more quickly and will perform better, generating increased and expected profits to originators, aggregators, investors and servicers. A rising tide lifts all ships.
BTW, although overall most states reported that the median homebuyer’s age had slightly increased, in nine states it actually declined, with North Dakota’s dropping from 41.3 years of age in 2005 down to 34.6 in 2014. So, what’s going on in big ND and why are more young people buying homes? Maybe it’s the weather; maybe it’s something else.
Regardless, Millennials are coming out to buy homes. It’s lending time.