How Millennial Homebuyers Can Overcome 3 Major Challenges in Today’s Housing Market

So much can be said about the millennial generation.

Most recently, researchers said there’s a new subset of millennials – geriatric millennials – referring to older millennials born between the years of 1980 and 1985.

Add this to a previous hypothesis that there are actually 6 additional types of millennials out there and we might be delving a little too deeply into this generation.

But whether you’re a “geriatric” millennial or “trendsetter” millennial – buying a house in today’s real estate market presents the same set of challenges the generations before yours didn’t have to scale.

Read on to learn about these challenges and how working with a great mortgage broker (like me!) can help you (or your client) overcome them.

Challenge #1: Smaller Nest Eggs Make Buying A Home Difficult

Millennials now make up the largest share of today’s new home-buying population.

At the same time, financial challenges – like high student debt rates, smaller savings nest eggs, smaller investments, and lower financial literacy – make it difficult for millennials to break into homeownership.

According to a new report from Freddie Mac, nearly half of millennial renters who say they want to buy a home have no savings set aside. And while alternative down payment options exist, statistics show that the share of millennials with savings accounts is “alarmingly low.”

The Solution

As a mortgage broker, I work closely with you and your clients to help get them on a successful financial path toward homeownership. I can also help them understand their loan options and whether or not your client qualifies for various down payment assistance programs that help make a home more affordable.

Read about my own recent experience adjusting my financial habits ahead of purchasing my first home on my own.

Self-Employed Millennials have a Harder Time Qualifying for Loans

Even before COVID plunged many of us into a remote lifestyle, the gig economy was rising – and millennials make up a large part of it (38%). This is shifting the dynamic for our labor force. Without evidence of a traditional income, it’s harder for self-employed workers to qualify for a home loan.

The Solution

Recent loan program qualifications have relaxed a little for gig workers. This is great news!

Applicants without traditional regular income sources and credit challenges within the last 12 months can now apply for financing and qualify in some circumstances. These updates are opening up the opportunity for self-employed applicant clients who previously have been turned down for loans.

If you’re helping a self-employed borrower, I’m here to help guide them through the pre-qualification process, including understanding what’s needed to prove steady income and, in some cases, raise their credit score if needed. I also stay on top of loan program updates for self-employed borrowers and I’d be happy to share what’s new with you and your clients anytime!

Rising Home Prices and a Housing Shortage Make It Hard to Compete

It’s a little crazy out there in the housing market today, no matter where you are!

There’s an extreme housing shortage in many locales and this is driving home prices higher. Mortgage rates have also been trending upward as a result, compared to last summer’s historical drop. What’s more, rising lumber prices are contributing to the shortage because new home construction in many neighborhoods has had to be put on pause.

Bidding wars are happening and homes are going under contract in record time. This unique combination of factors, unfortunately, doesn’t bode well for some millennial homebuyers. It’s difficult to compete in multiple offer situations when you may lack the funds for a down payment and closing costs – and when there are credit challenges involved.

The Solution

There’s good news about how long these market conditions may last.

Some market analysts predict there will be more housing inventory available toward the fall of 2021 and into early 2022. Mortgage rates are also predicted to remain low throughout the end of this year.

I tell all my clients that achieving the dream of homeownership, when it’s the ideal time for your personal financial situation, is worth the wait. Today’s real estate market conditions won’t be forever. We’ve seen conditions like these before. What’s most important is getting yourself or helping your client get on a path toward

  • Saving for a home
  • Becoming qualified to finance a home
  • Feeling the rewards of achieving homeownership when it’s the right time

This is true whether you or your client is a millennial, a Gen X’er, a Gen Z’er, a baby boomer, or a member of the so-called Silent Generation.

Ready to Buy A Home or Get on a Path Toward Homeownership? Call Me!

I’m a licensed mortgage broker in Arizona, Florida, Colorado, and California – and I can help you and your clients find and apply for the right home loan for your needs. I can also help them embark on a path toward homeownership by working with them to understand financial strategies that set them up to qualify for financing.

Give me a call at 480-313-7103 or email me at sam@mindfulmoneyusa.com to discuss the many paths toward homeownership!


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.