Is It Time for Young Families to Buy a Home?

We have reported that almost six million adults between the ages of 25 to 34 are currently living with their parents. That number reflects an almost 50% increase since 2003. These young adults are now being advised to jump into homeownership.

Who are the people selling them on the American Dream? Their parents! It seems that parents of some adult children are strongly suggesting that their children take advantage of the low cost of homeownership available today. Some moms and dads are helping financially and are even co-signing for the mortgage. Middle age parents who have owned a home understand its true value. A home has always been a good long term financial investment. However, homeownership also has many other benefits.

In Fannie Mae’s most recent National Housing Survey, they asked the question directly: Is this a major reason to buy a home?

The study broke up the answers into financial and non-financial reasons. The top four reasons and six of thetop ten reasons were NON-FINANCIAL. The top four are below:

  1. It means having a good place to raise children and provide a good education.
  2. You have a physical structure where you and your family feel safe.
  3. It allows you to have more space for your family.
  4. It gives you control over what you do with your living space (renovations & updates).

Should this surprise us? Aren’t these the same reasons our parents bought their home? Aren’t these the same reasons we purchased our home? These are the same reasons parents have suggested their children buy a home. They want the same things for their grandchildren that they believed to be important for their children.

And today, the cost of homeownership is at all time lows:

J.P. Morgan

“The numbers on housing have an important message for American families today, and particularly younger families setting out on life’s great adventure: Five years ago, at the peak of the home-buying euphoria, it was emphatically a time to rent. Today, when home ownership is depreciated more than ever before, the numbers tell us it is a time to buy.”

MSNBC.com

“[S]omeone who plans on staying put for seven years would come out ahead by about $9,000 if they bought a median-priced home rather than being a tenant in a median-priced rental.”

HUD

“Homes today are more affordable for average families than they have been since 1971. Median-income families today have nearly double the funds needed to purchase the average home.”

Bottom Line

Now that the economy is beginning to show signs of stabilizing, people are getting back to the core values that families have always embraced. Homeownership is definitely high on that list. And today, from a financial standpoint, it may be the opportunity of a lifetime.

 This Article Was Provided by The KCM Blog www.kcmblog.com
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How much home can I afford?

This is an extremely important factor when planning to buy a home. Many aspects are taken into consideration by lenders to come to an amount that will be given to you. The major factors are income, credit, debt and assets. You can have a lot of income but no credit and get turned down by many lenders. This lack of credit can mean many things. If most of your money is tied up in a business or you only have business credit cards, or you have only used cash for your purchases to this point in your life. Your credit is a lending lifeline and without it, you are basically out of luck. If you have great credit but only a little income, you will have to look for a very affordable home because the bank will not lend you a lot considering your income is low. A major problem in the U.S. today is student debt. You can have a great job and good credit, but if you have a major amount of student debt, some lenders will not get near you. Assets can also be a drain on how much you can afford. If you have multiple cars or properties, a bank can look at that negatively. I don’t mean to scare you, but this is why it is extremely important to have a good and knowledgeable lender who can help you figure out a comfortable mortgage amount that also suits your living needs. Check out this calculator from CNN Money to see how much you can afford, but remember to speak with a professional lender first. They will meet with you for free and discuss your needs or you may contact me directly for more information.

Mortgage Amount Calculator 

Cary Daniel Blumenfeld

Realtor (R)

Harry Norman, Realtors

678.983.7987