Millennial Student Debt Leading Cause in Drop in First Time Homebuyers: Opens Door For Single-Family Real Estate Investors
Student debt is crippling the millennial generation, and is perhaps the major cause for the decreased number of first-time homebuyers in that generation. Recent graduates in their mid-to-late 20s simply have neither the stability, nor the financial resources to buy their first home. Those students who enrolled in 2008 and 2009 are graduating into an economy that is still recovering, which means that it takes more time to find a permanent job, and subsequently they are in debt for longer than their predecessors were. This debt causes a less-than-desirable credit score, fewer young people can actually qualify for a first-time mortgage.
It’s Not for Lack of Desire
This lack of ability to purchase a first home does not mean that this generation doesn’t want a family and a house with a white picket fence as their parents did – it will just take longer for them to get to a place where that dream is financially feasible. Until it’s possible for them to raise the funds for the down payment on their dream house, or to fix their credit score to the point where they will qualify for a mortgage, these young people are limited to being a part of the new rentorship society.
While this is not a positive development for Millennials, it does have favorable implications for real estate investors. The Millennial generation is in their mid to late 20s. They’re starting to get married have families, and while they can’t afford the trappings of traditional adulthood as their parents could, again, they still do not necessarily want to give it all up. This problem is one of the contributing factors to the increase in the number of single family rentals all over the country, and many of the rental prices in these areas are still high enough that it provides a positively cash-flowing revenue stream for real estate investors. Should you want to take advantage of this situation, HomeUnion® can help you invest in cash-flowing single-family rentals across the country from comfort of your browser. Here’s some more information to help you decide if this option is right for you.
For more information on this subject, please refer to the Wall Street Journal.