There are a lot of myths and misconceptions around buying a home, and those myths and misconceptions can cause people to misunderstand if, how, and why they should buy a home, which blocks them from homeownership. While these myths can be a roadblock for any buyer, they have a major impact on Millennials and Gen Z.
So what, exactly, are the myths keeping would-be Millennial and Gen Z buyers from successfully buying a home, and what truths can empower them to transition into homeownership?
A recent article from realtor.com debunked common myths that are keeping millennials and Gen Z from successfully buying homes, including:
- Interest rates are at an all-time high. Are interest rates high, especially when compared to a few years ago? Yes. But many Millennial and Gen Z buyers think today’s rates are at an all-time high, which is simply not true. Interest rates were much higher in the 1980s, peaking at 18.63 percent in October 1981 — more than triple today’s rates.
- You need a 20 percent down payment. Many younger/first-time buyers think that a 20 percent down payment is a non-negotiable for buying a home. But while putting 20 percent down is ideal because you’ll avoid private mortgage insurance, which can increase your monthly housing costs, it’s certainly not a must. There are plenty of loans with much lower down payment options, like Federal Housing Administration (FHA) loans, which only require a 3.5 percent down payment.
- Only people with stellar credit can get a mortgage. Many Millennials and Gen Z-ers think that a less-than-perfect credit score will prevent them from getting approved for a loan. But you don’t need perfect credit to buy a home. For example, if you put down 3.5 percent, the credit requirement for an FHA loan is just 580, and that number is even lower (between 500 and 579 percent) if you put 10 percent down.
So, if you’re a Millennial or Gen Z-er, don’t let the myths and misconceptions about homeownership prevent you from buying a home. If you’re ready to make your dreams of owning a home a reality, talk to a real estate agent; they can tell you the truth about the market, and help you navigate finding the right home for you.