Millennials: Here’s Why the Process is Well Worth It.
Presented as a public service by Joe Peters of Coldwell Banker
Millennials have waited longer than any other generation to become homeowners, but the wait for this cohort is just about over.
According to National Mortgage News,
“Millennials, those young adults now aged 23 to 38, are now entering their peak household formation and homebuying years.”
If you’re a Millennial, you’re already well aware that you’re among a generation of those who favor fast-paced, real-time answers – and results. When you’re ready to make a decision, it’s go-time, and you probably want the latest technology at your fingertips to make it happen.
National Mortgage News agrees, stating,
“Millennials are different than previous generations—not only in their delayed homebuying but also in how they approach interactions with financial institutions, including mortgage lenders. Taking a picture of a check on their phone and depositing it without visiting a branch is not novel, it’s the way Millennials learned to do banking. They expect real-time access to account and transaction data and are frustrated when it’s not available.”
Here’s the catch – the overall speed of the homebuying process can take some time, and it might feel like it is slowing you down. When you’re ready to buy, you can make an offer and go under contract quickly, but the rest of the process might take a little longer. The same article explains why:
“When Millennials apply for a loan, the mortgage lender must qualify the borrower and determine who owns the property, how much the property is worth, and the property’s risk profile. Traditionally, this has been one of the most time-consuming and fragmented parts of the mortgage process…There are many moving pieces, each data point being sourced from a different provider, which can ultimately lead to a lengthy or delayed process.
What has historically been accepted as the process norm does not align with the expectations of the most prominent generation in the home buying market today. Millennials have come to expect rapid, digital workflows in their daily purchase decisions, and in their mind, the home buying process shouldn’t be any different.”
So, where do you go from here?
If you’re pre-approved for a mortgage, that will help speed things up. But the steps it takes and the time to finalize a loan with most traditional lenders may feel like an eternity to you and your generational peers. Don’t worry, though – it’s well worth the wait when you finally get the keys to your new castle!
The financial benefits of homeownership, like increasing your net worth by building equity, and the non-financial benefits, like being able to customize and improve your space, will ultimately set you on the course to happiness, success, overall satisfaction, and much, much more.
If you’re feeling like it’s go-time, let’s get together and get the process moving to determine if homeownership is your next best step.
Presented as a public service by:
5 Tips for Starting Your Home Search
Presented as a public service by Joe Peters of Coldwell Banker
In today’s market, low inventory dominates the conversation in many areas of the country. It can often be frustrating to be a first-time homebuyer if you aren’t prepared. Here are five tips from realtor.com’s article, “How to Find Your Dream Home—Without Losing Your Mind.”
1. Get Pre-Approved for a Mortgage Before You Start Your Search
One way to show you’re serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage. Even if you’re in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach. This will help you avoid the disappointment of falling in love with a home well outside your price range.
2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’
Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Before you start your search, list all the features of a home you would like. Qualify them as ‘must-haves’, ‘should-haves’, or ‘absolute-wish list’ items. This will help you stay focused on what’s most important.
3. Research and Choose a Neighborhood Where You Want to Live
Every neighborhood has unique charm. Before you commit to a home based solely on the house itself, take a test-drive of the area. Make sure it meets your needs for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”
4. Pick a House Style You Love and Stick to It
Evaluate your family’s needs and settle on a style of home that will best serve those needs. Just because you’ve narrowed your search to a zip code doesn’t mean you need to tour every listing in that vicinity. An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”
5. Document Your Home Visits
Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy and making notes on the listing sheet to document what you love and don’t love about each property you visit.
In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home.
Presented as a public service by:
Yes, Millennials Really Are Fleeing the State. The Data Says So
Reposted from NJFuture.org
Contrary to some of the latest headlines, the recently released report commissioned by New Jersey Policy Perspective does in fact show that there is currently a net out-migration of Millennials from New Jersey, corroborating New Jersey Future’s 2017 report. The fact that Millennials are leaving the state is not a myth.
The NJPP report set out to answer two questions: whether Millennials are leaving now at a faster rate than they have in the past; and whether Millennials are leaving at a faster rate from New Jersey than from select other high-cost states. The report concluded that the answer to both questions is no, but the data in the report showed that indeed Millennials are leaving both New Jersey and its neighbor states. Whether they are leaving faster, slower, or at the same rate as the previous generation of young people — for which appropriate data to support these assertions do not exist — does not change the fact that this generation is looking to live elsewhere. The young-person migration issue and the NJPP analysis are analogous to saying that our state’s water is polluted and has been for some time and is about as polluted as the water in neighboring states. It’s interesting to know this information and that we are consistent, but we still have a problem.
New Jersey Future has planned for the fall a series of articles looking into where out-migrating New Jersey Millennials have gone, and whether specific types of destinations provide clues as to what Millennials are looking for but are not finding in New Jersey. We will send out an announcement when each of these articles is live. In the meantime, below is a more detailed analysis of the trend.
Let’s start out by defining “Millennials” as people born between 1980 and 2000. How many such people are there, nationally and in New Jersey?
In 2000 — the year in which the last of the Millennials were born and when we’re first able to count all of them — the youngest Millennials were under 1 year old and the oldest were 20. So the age range 0 to 20 roughly represents the Millennial generation in the year 2000. In that year, there were 84,522,713 people 20 and under in the country, and in New Jersey there were 2,380,877.
In 2016, the youngest Millennials (those born in 2000) were 16 years old, and the oldest (those born in 1980) were 36. Unfortunately, the standard Census Bureau age ranges do not match up exactly to these endpoints, so we have to approximate. Based on inferences from Census Bureau age range data , in 2016 there were approximately 92,178,152 people aged 16 to 36 nationally and 2,420,989 in New Jersey. (More detail on how these approximations were calculated is available upon request .)
Note that these both represent increases over the numbers from 2000. So if we were already counting the entire Millennial generation in 2000, how could the numbers of people in the country born between 1980 and 2000 have gone up? The answer: immigration.
The Immigration Effect, Nationally and in New Jersey
Between 2000 and 2016, both New Jersey and the country will have lost a small fraction of native-born Millennials to premature deaths, but we will have gained a lot more by absorbing young people through immigration. The United States has a net positive international migration flow, as does every individual state – that is, every state receives more in-migrants from other countries than it loses out-migrants to other countries. New Jersey is a particularly popular immigrant destination: It gained a net of 320,000 people via international immigration between 2010 and 2016 – 5.1 percent of all U.S. immigration, despite New Jersey only making up 2.8 percent of total U.S. population in 2016.
This international inflow represented 210 percent of New Jersey’s total population growth, meaning that without immigration from other countries, New Jersey would actually have lost population (thanks to more people moving from New Jersey to other states than moving into New Jersey from other states).
So, immigration is how the number of Millennials actually increased between 2000 and 2016, both nationally and in New Jersey. The increase was 9.1 percent nationally, and a far smaller 1.7 percent in New Jersey, despite New Jersey being a particularly popular immigrant destination. Instead of exceeding the national rate of increase, which would be the expectation thanks to New Jersey attracting a disproportionate share of international immigrants overall, the number of Millennials in New Jersey actually increased at far less than the national rate, and in fact barely increased at all. This could only have happened if a lot of the Millennials who were born in New Jersey moved elsewhere between 2000 and 2016 and weren’t replaced by Millennials moving in from other states, and were only barely offset by Millennials moving in from other countries.
How Millennials Compare to Generation X Nationally
Now let’s look at the size of the Millennial generation compared to the previous generation, Generation X, who are generally defined as having been born between 1964 and 1979. Note first that these two generations are not defined using the same number of years – the Millennials’ age range includes 21 years (1980 through 2000, inclusive of both endpoints), while that of Generation X only includes 16 distinct birth years. So the sizes of the generations are not directly comparable because of the different widths of the intervals.
For that reason, let’s restrict our analysis to the generations in their “young adult” years of 22 to 34, when most people have graduated from college and are more likely to be in charge of their locational decisions. In 2000, the 22-to-34 age range included people born from 1966 to 1978, matching up pretty closely with the common definition of Generation X. Fast-forward to 2016: The 22-to-34 age range included people born from 1982 to 1994, representing all but the youngest of the Millennial generation, and comprising the subset of Millennials who were old enough to be making their own locational decisions (rather than just leaving the state for college). Let’s call these the “working-age Millennials.” Working-age Millennials were age 6 to 18 in 2000.
In 2000, there were 50,965,195 people age 22 to 34 nationally – this was Generation X in their young adult years. Also in 2000, there were already approximately 53,097,840 future 2016 working-age Millennials, meaning they already outnumbered Generation X, even before their ranks had a chance to be augmented by immigration. By 2016, the number of people nationally age 22 to 34 had swollen to 57,486,614, an increase of 12.8 percent, thanks to the older end of the larger Millennial generation replacing Generation X in this age range. Thus a national 12.8 percent increase in the number of 22-to-34-year-olds can be taken as a benchmark for what is likely to happen everywhere, all other things being equal, when a larger generation replaces a smaller one in the young-adult stage of life.
Millennial vs. Generation X in New Jersey
But in New Jersey, the number of 22-to-34-year-olds increased only by 1.8 percent between 2000 and 2016 – only one-seventh the national rate, or one-seventh the default increase to be expected by the larger generation replacing the smaller one in the young-adult years. This is despite the fact that, in New Jersey, just like nationally as noted above, the number of people age 6 to 18 in 2000 – the future 2016 working-age Millennials – already exceeded the size of Generation X, even before being supplemented by immigration. Thus New Jersey’s very small increase in the number of young adults cannot be attributed to some demographic anomaly in which New Jersey started out with proportionately fewer Millennials at birth than was true nationwide.
If the replacement of Generation X by the much larger Millennial generation in the young-adult stage of life resulted in a 12.8 percent increase nationally in the number of 22-to-34-year-olds between 2000 and 2016, and if the Millennial generation is disproportionately larger than Generation X throughout the country, then we would also expect this same process of generational replacement to produce roughly a 12.8 increase in the number of 22-to-34-year-olds in New Jersey. But it didn’t. If it had, the number of 22-to-34-year-olds in New Jersey in 2016 would be more like 1,667,196 (a 12.8 percent increase over New Jersey’s population of 22-to-34-year-olds in 2000), instead of the actual 1,505,190. So New Jersey’s population of 22-to-34-year-olds in 2016 is about 162,000 shy of where it ought to be if generational replacement were happening as expected. This means almost 10 percent of the 22-to-34-year-olds one would have predicted to find in New Jersey in 2016 are, essentially, “missing.”
This shortfall in the expected number of young adults in New Jersey in 2016 can only be explained by one or both of two things. Either New Jersey’s home-grown Millennials moved out of the state at a higher rate than previous generations, eroding the expected increase in the size of the young-adult population, and/or New Jersey’s Millennial population did not get supplemented by in-migrants from other countries to the same extent as in previous generations, robbing the young-adult population of one of its past sources of growth. So either a good chunk of New Jersey’s Millennials have fled the state, and/or potential in-migrating Millennials from elsewhere have chosen to stay away. Neither of these results is good for New Jersey’s future prospects, and both deserve to be addressed.
Top Millennial ZIP Codes Trend Toward Urban Cores
This article orginally appeared on BUILDER’s sister site, Multifamily Executive.
It’s not a news flash to learn that Millennials—people born between 1977 and 1996—love living in the city. But what cities and urban areas in particular do they favor?
To find out, apartment-search firm RENTCafé analyzed U.S. Census data to find where millennials live and their next potential hot spots. The company then ranked ZIP codes in the 30 biggest U.S. cities by three measures: (1) highest increases in millennial population from 2011 to 2016; (2) largest current share of millennials; and (3) highest current population of millennials.
Highest Increases in Millennials
As predicted, downtown and areas surrounding urban landscapes are the clear favorites among the Gen Y crowd. Two downtown Los Angeles ZIP codes, 90014 and 90013, saw the highest increases of millennials from 2011 to 2016, at 91.4% and 60%, respectively. The third- and fifth-ranked ZIP codes jumped over to the East Coast, in New York City’s Battery Park City and Lincoln Square, with 54.5% and 47.7% reported increases, respectively.
In the rest of the top 20, Denver has four ZIP codes present, with one near downtown and three in neighborhoods. Other top cities with the highest influx of millennials include San Francisco and Philadelphia, with two each.
Greatest Share of Millennials
ZIP codes with the largest share of millennials differed from those experiencing the highest Gen Y increases. In Chicago’s West Loop, 60661, 73% of residents are millennial members. The study reports that this ZIP code “is as close as it gets to business without actually being in the Loop, and has only recently been turning into a more residential area.”
Two neighborhoods tied for second in millennial share, with 71%: Philadelphia’s Manayunk and lower Manhattan’s Financial District. The downtown areas of Denver; Dallas; Oklahoma City; Columbus, Ohio; Charlotte, N.C.; and Indianapolis also have high shares of millennials.
Highest Population of Millennials
Population-wise, areas surrounding New York City make up nine of the top 20 of those with the largest millennial populations, but none is in Manhattan. From Williamsburg in Brooklyn to Corona in Queens, over 40,000 millennials call these ZIP codes home. ZIP code 11211, in Williamsburg, houses 43,700 millennials, the largest amount in the U.S.
Chicago comes in second in population, with its Lakeview neighborhood (41,500) and has another six ZIP codes in the top 20 list. The other four remaining population-heaviest cities are Los Angeles; El Paso and Houston, Texas; and San Francisco.