The prospect of buying a home early on has always been a dream for most young Americans. Indeed, homeownership is every sane man’s dream!
Unfortunately, this dream is becoming harder and harder for most young Americans to achieve as the number of purchases being made by this age group dwindles.
Financial Struggles for Young Americans
This is according to a recent study carried out by the Stanford Center on Longevity into generational housing trends.
In fact, the study pegs that homeownership has decreased by 63 percent in 2016, making it the lowest rate in half a century! Which revives fresh wounds of the 70 percent decrease that was experienced in 2005, at the time that subprime lending was at its highest.
Moreover, researchers discovered that homeownership was reducing especially among individuals that were below the age of 30 when in comparison to other generations.
Purchasing a House at a Later Date
According to one of the research scientists at Stanford, Ms. Tamara Sims, the reason for this could be that they are unable to hit the mark of purchasing a house as compared to how their parents performed.
Which begs the question; why is there a delay? One of the reasons could be that people automatically want to sell the moment they have a family.
That being said, the chances of owning a home by the time a person reaches 30 increases exponentially by about 30 percentage points especially for those that are already married and have children.
No Rush to Start a Family
However, in these modern times, young individuals are in no rush to get married and have children.
Indeed, in the ‘60s, the average woman and man were getting married and having kids in their early twenties. Today, the story is entirely different. The median age at which individuals consider getting married plays at around 30 years.
Moreover, the number of households of individuals that are married with kids between the ages of 18 to 34 has reduced by 25 percent in 2015. This is in comparison to the 37 percent that was recorded by the Urban Institute in 1990.
Additionally, other factors that need to be looked at include the whole issue of student debt. Indeed, it has played a critical role in the decline of homeownership among young Americans across the board.
For example, the average student debt for the American student us $30,000, which has risen from the $16,000 that was recorded during the 1990s.
Indeed, those who are still struggling to pay their student loans at the age of 30 are less likely to buy and own a house by 32 percentage points as compared to those that had never borrowed while they were studying.
That being said, the prospect of purchasing property much later in life may result in some millennials entering old age being less financially secure.
Indeed, homeownership is one of the key pillars of preparing for retirement successfully. As a matter of fact, buying a home at the age of 50 or 60 will not do anyone any good while still funding for your retirement.
What to Look for When Purchasing a House
Nevertheless, here are some of the factors to consider when in the process of purchasing a house.
Inquire whether the house is the developer’s –Some developers take money from homebuyers as they purchase the property. Nevertheless, the ownership could still be under that of the property owner. Indeed, this is a common practice within developers who are looking to minimize the costs of bank loans.
Therefore, the details are not revealed to homebuyers and if an investor does not purchase the property, they buyers can be a big mess. That being said, a clause needs to be put as part of the contract to ensure the buyers’ protection in case of this situation.
Property security for a loan–Lawyers are given the task of due diligence to confirm that their property was not used in the process of loan security, and if this is the setup, they work to ensure that the contract puts the interest of the buyers first.
Organize a payment plan-The contract must clearly state the timeline for penalties, payment and any issues regarding hidden fees to ensure that the buyer is protected from any hidden charges that might be put in place.