Home-buying milestone

First-time, millennial buyers consider various factors before making purchase

As more millennials approach the milestone of buying their first home, the real estate industry is finding that this group is gravitating toward different trends than their predecessors.

According to Kristin Tillman, a Realtor with Greenwood King Properties, one of the first challenges is really understanding the homebuying process, which is why it’s important to work with a knowledgeable Realtor.

“Aside from knowing where you want to live and why, knowing how the process works is paramount,” Tillman said. “A Realtor can help make sure the buyers are on the right track, and consider other aspects like negotiations, inspections, title, surveys, and homeowners associations.”

According to Paige

Martin, team lead, Houston Properties Team and broker at Keller Williams Realty, one challenge is the current struggle for job stability. The unemployment rate in Texas is currently at 13%, according to the Texas Workforce Commission.

“In this time of uncertainty and economic crisis, it is quite a challenge for millennials to plan for investing in something as large and longterm as a home,” Martin said.

Qualifying for a mortgage is another challenge first-time buyers face. While mortgage rates are at an all-time low, a number of larger banks and mortgage lenders are requiring a higher credit score to be able to qualify, resulting in mortgage credit availability decreasing by more than 25% this year, Martin said.

“Speaking to a lender is key — how much a buyer wants to spend and can spend provides a guide to move forward confidently when that right home pops up,” Tillman added.

On a similar note, student loan debt is now the secondhighest consumer debt category, behind mortgage debt, according to Forbes.

“The amount of this student debt pushes up someone’s debt-to-income ratio, making it even more challenging to qualify for a home,” Martin said.

As for key factors millennials and first-time buyers tend to gravitate toward, walkability is a big one, Martin said.

“Today’s buyers would like to be able to simply walk to local stores, coffee shops, and parks from their home. Apart from convenience, it makes it easier to immerse themselves into the neighborhood they choose to be a part of,” Martin said.

Finally, trendy and diverse neighborhoods are another very important factor to today’s buyers, Martin said. Neighborhoods like EaDo, Montrose, the Heights, and Midtown are in demand among millennial home buyers.

“Young home buyers are more drawn toward areas that have an abundance of bars, restaurants, and parks that are easily accessible…,” she said. “Most new buyers want some sort of green space for pets or simply enjoyment,” Tillman said.

“Speaking to a lender is key — how much a buyer wants to spend and can spend provides a guide to move forward confidently when that right home pops up.” -Kristin Tillman, Realtor, GKP