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Every demographic has its own traits and behaviors when it comes to the real estate and mortgage markets. In this article, we’ll discuss the latest home buying trends among millennials in Washington state.
A new report from the mortgage software company Ellie Mae sheds light on millennial home buying trends in Washington State and across the nation.
At 92 million strong, millennials (born between 1980 and 2000, roughly) are the biggest generation in U.S. history. So they make up a large portion of the real estate market as well. This generation is poised to reshape the economy, and possibly the housing market as well.
According to Goldman Sachs Global Investment Research: “As Millennials enter their peak home-buying years, their reluctance to enter the housing market could change. The cohort’s sheer size, plus its desire to settle down in the future, could lead to a surge in home sales.”
Millennials are a driving factor in the Washington State real estate market as well, particularly in the Seattle area. According to a recent report by the Urban Land Institute, Seattle is one of the top 20 cities in the U.S. where millennials are moving. Within Seattle, the size of this demographic increased 14% from 2014 to 2018.
This influx brings more home buyers into the Washington real estate market, which in turn puts upward pressure on home prices. Especially at a time when housing inventory is limited.
According to the Millennial Tracker™ report from mortgage software company Ellie Mae, the average time to close a loan for millennial borrowers was 43 days. It should be noted, however, that this can vary due to a number of factors.
According to the Institute of Politics at Harvard University, 42% of millennials report that they or someone in their household has student loan debt.
In some cases, excessive debt can make it harder for a person to buy a home because of mortgage qualification rules. But we have seen some easing on this front.
In a recent blog post, we explained that a policy change made by Fannie Mae could make it easier for millennials with student loan debt to qualify for mortgage financing. Specifically, the change increases the debt-to-income ratio limit for borrowers from 45% to 50%. In other words, millennial home buyers could qualify for mortgage financing with higher debt levels than in the past.
According to a related news release from the company, this change “will result in more loans with [debt-to-income] ratios between 45 and 50 percent receiving an Approve/Eligible recommendation” from their underwriting program.
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, California, and Colorado since 1992. We offer many mortgage programs to buyers all over the Pacific Northwest. Contact us today with any questions you have about mortgages.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.