Written by Alexandra Wowk

Being a millennial is often looked at as being the youngest in the room, but that is no longer the case. They are here and ready to take on the world. Millennials are all around you, they are adults, between the ages of 23-38 by the end of 2019. They are starting to take over the housing market; as much as they can anyway. Between high mortgage rates and prioritizing buying a home over other gaols and values, millennials are making their presence known.

Although only 1 in 3 are currently homeowners, millennials have some of the highest mortgages and loans in dollar value compared to every generation before them. Sitting at an average of 42% of all loans whereas baby boomers hold 40% and gen-X only hold 18%. Although these statistics can be easily explained away when you consider the fact that millennials put down the smallest down payments in comparison to baby boomers and gen-X. It has been reported that millennials put down an average of 8.8% when buying a home, comparatively baby boomers average 11.9% down and gen-X average 17.7% down. The lower down payments also lead to purchasing cheaper homes, the median price of the homes bought by millennials is $238 000, which is $21 000 less than baby boomers and $51 000 less than gen-X. This is difficult as home prices are the highest they have ever been.

Taking on buying a home at a younger age has never been more attractive but it has cost some of the things older generations place value in, such as marriage. The ideals and customs that millennials deem important compared to older generations has changed. Home ownership is taking prominence, where marriage is taking a back seat. About one quarter of millennials are buying homes with their significant other before marriage, as they would rather be paying off a mortgage toward something, they own instead of paying rent. Buying is seen as the better option in the long run as rents increase. Unfortunately, there are pitfalls to buying before marriage. In the eyes of the law, an unmarried couple is seen as two individuals and therefore not guaranteed the same splitting of property should the relationship fail, as they would in a divorce. In addition to that there are a lot of hidden costs when buying a home that most do not consider.

Most millennials do not realise that there is more to buying a house than comparing rent to mortgage payments. Many of the hidden costs are not considered, because they are not obvious. Closing costs, property tax, upkeep of the property, insurance and many other things cost quite a bit and need to be considered before purchasing. It is recommended that 3% of the cost of the home is spent on repairs and improvements each year. These expenses need to be kept in mind when considering the budget that can be put towards a home.

The housing market is starting to flood with younger generations as they come of age. With the hidden challenges and home expenses rising, are they ready to take over? Spending less on houses in a more expensive market is the best they can do while paying student loans off while paying a mortgage. Taking on the world is a difficult task, but they are stepping up, one home at a time.