If you’re wondering who that first-time millennial home buyer is — it’s me. I graduated from college during the height of the recession, do enjoy avocado toast, would prefer to venture through a walkable city center than fill my car with gas any day, and wasn’t always so convinced of the value of buying a home. Fast forward to the cusp of 2020 and yours truly is aggressively saving with a singular focus on buying a home.
While working at realtor.com with this goal in mind is one timely demonstration of serendipity at it’s finest, the fact of the matter is that I do fit the millennial mold. I got married just over a year ago. My spouse and I have a dog that we’d eventually like to provide a backyard for, and down the road, would like to add children to our family. All this to say that my perspective has certainly changed with life transitions.
Despite my wish to have my figurative avocado toast and eat it too, I also deeply care about financial security and making the right decisions for my family. Living in the San Francisco Bay Area with the cost of living as it is, it makes more sense to put our money towards a mortgage than go toe-to-toe with increasing rent prices.
And guess what? We’re not alone. According to the realtor.com 2020 Housing Forecast, millennials will surpass 50 percent of all home-purchase mortgages in the coming year.
Am I nervous? Excited? Of course. There’s much to consider. One of the things my spouse and I have done to prepare is something we talk about frequently at realtor.com — evaluating the costs of needs versus wants. Even though a three-bedroom home sounds lovely, we may need to compromise and target two-bedrooms instead. Going along with that is having a thorough understanding of a realistic budget.
When we started looking into homes for sale on realtor.com, we reached out to the realtor.com concierge service. After spending a few minutes with us on the phone, they suggested that our first step should be to connect with a mortgage broker. Based on a subsequent conversation with a mortgage broker, my spouse and I realized we wanted and needed to sit down with a financial advisor to identify how we would reach our down payment goal and optimize what a realistic number would be for us.
Since then, discipline has been the name of the game. I definitely love a morning latte just as much as the next person, but have had to cut down on this sort of fringe expense. Just think how much you could save by cutting down on a daily coffee run over the course of a year.
I’m also taking heed with the front row seat I have from my colleagues to stay up to speed on economic trends and how they apply to my own home-buying journey. For instance, our economics team believes that interest rates are likely to continue to be low throughout 2020, but so is inventory at the entry-level category. That means a few things for my millennial home shopper peers and me.
It will be crucial to lean on the expertise of a real estate professional who is familiar with my locale to know when homes that could be the right fit become available on the market. Similarly, I’ve set up saved searches and alerts on realtor.com so I don’t miss the potential home of our dreams.
And after working with a financial advisor and mortgage broker, my spouse and I have pre-approval next on the to-do list. Since the number of homes is expected to be low, getting pre-approved will enable us to quickly make an offer when we find the right home instead of wasting time with the process later and risking missing out because another buyer was ready. The other bonus of pre-approval is that it shows the seller and their agent that we are serious about buying.
If there’s one thing you should know about housing trends heading into 2020, it’s this: millennials’ home-buying profile is changing, just as mine is. Some of us are about to turn 30 this year, some of us are approaching 40, we are a dynamic cohort of career go-getters, and we want to have a home to call ours. We’ve always been an ambitious bunch, so you know what that means. We’re probably going to be your new neighbors. At least we hope to be. Wish us luck!
To learn more about first-time home buying resources and tips, access the realtor.com first-time home buyer guide.