As the COVID-19 pandemic rages on and lives continue to be changed forever, some people are finding that, unexpectedly, they’re in a position to take advantage of some of the lowest mortgage rates in a long time and purchase a home. Of course, this isn’t the case for everyone. But a large number of Millenials are suddenly finding themselves prospective home owners for a variety of reasons.
Not Everyone Is Flourishing
With unemployment staggeringly high due to the pandemic, a whopping 7.9%, uncertainty is the name of the game for thousands of Americans. And with the economy struggling to recover from a summer shutdown for the pandemic, millions more have finances in flux. This has led to housing insecurity for millions of American families who look to Washington to send reprieve in the form of another eviction moratorium. As negotiations in Washington stall, the future of relief from the government remains uncertain.
Millenials Find Themselves With Unique Opportunities
Millenials are more likely to be in an industry or job where they can work remotely. A good number of jobs have been able to transition to remote function, providing certainty for a number of Millenials that their older counterparts might not currently be enjoying. While the majority of Millenials have felt the crunch of the pandemic economy like other age groups, a small subset of Millenials find themselves with more savings and more options for home ownership due to their remote jobs.
According to a report filed by Realtor.com, the Millenials who are able to purchase despite the pandemic are in a position to do so for a variety of reasons. Per Realtor, “Almost half of millennials, 49%, pushed up their plans to buy a home due to the pandemic, according to the survey. Of the roughly three-quarters of millennials surveyed who are now working remotely due to the threat of contracting COVID-19, nearly two-thirds hope to buy a home because they can now telecommute.
Many are motivated to move because their current home doesn’t fit their needs anymore (26%), according to the survey. A big backyard, a home office, and space for the kids to do schoolwork never sounded so good! The second most popular reason for wanting to buy was to accommodate a growing family (23%), while taking advantage of low interest rates and living in a safer community accounted for the rest.
“Wanting to capitalize on low mortgage rates and buy before prices go up even further is accelerating the buying timeline,” says Hale. The average rate for a 30-year fixed-rate mortgage was just 2.88% in the week ending Oct. 1, according to Freddie Mac.
Just over two-thirds of millennials surveyed, 68%, have been able to boost their savings during the pandemic. And nearly half, 45%, are expecting to receive financial assistance from family and friends in paying for their new home.”
While Millenials historically have a smaller home ownership rate than both Generation X and Baby Boomers at the same ages, the ability to work remotely and seamlessly retain employment may make up some of the gap.
As Millenials Approach Middle Age, the Pandemic Changes the Landscape
With Millenials looking for more stability, home ownership, and the chance to build a nest egg as middle age approaches for the oldest ones, the pandemic is a monkey wrench in the works. If the boon of being able to save more money and expand the home ownership rate is a trend that continues, Millenials may be the only generation to come out of the pandemic with an edge. Right now, however, much of the advantage Millenials could enjoy to close the home ownership gap remains speculation. Time will tell if intentions and plans turn into real gains.