Where college degrees, homeownership meet
Posted on Monday, May 23, 2016 at 2:55:19 PM
Millennials and other younger individuals who are looking to purchase homes have run into some substantial challenges throughout the past several years, which is somewhat strange given the bigger picture of the residential financing market. For one, both demand and supply of home loans have been solid across the nation, and the real estate market has improved vastly itself, meaning that opportunities to purchase should be plentiful for all.
However, millennials are increasingly likely to try to purchase a home as time goes on, but are finding it hard to receive the loans they need to do so. Unfortunately, new studies are showing that certain types of millennials are less likely to be able to purchase a home, despite having intentions to do so. These issues will need to be corrected to ensure the long-lasting health of the residential real estate market.
Grads do better
National Mortgage News recently reported that a First American Financial Corp. study revealed that individuals who do not hold a college degree are far less likely to own a home today. The source pointed out that the difference was about 15 percent in 1990, but this rate has grown to 28 percent as of 2015.
"People with higher education levels are more likely to earn higher incomes, and thus more likely to own homes," First American chief economist Mark Fleming explained, according to the news provider. "The good news is that educational attainment levels are improving nationally, so we are on the right track."
Other similar studies have found that the real trouble is involved in saving. The Wall Street Journal reported that one study found individuals who do not own a degree will take an average of 15.5 years to save up the 20 percent often required as a down payment compared to the 10 years graduates who have student debt will take.
Fixing the problem
Sometimes, the best approach to acquiring residential financing is to avoid the bigger banks and mortgage providers, instead choosing to work with a local, community bank. The more personalized service will often help to ensure that the applicant not only receives the loans they need, but get them in the form of programs that best suit their unique needs and goals.
Community banks can help millennials find the financing they need.