The reluctance of many millennials to buy a home has been well-documented over the last few years, but that is changing. According to realtor.com. millennials now account for the largest share of loan volume — 42% in December of last year. In spite of significant home price appreciation and low inventory in a number of U.S. markets, growing numbers of this generation are entering the real estate market. That trend is likely to accelerate, in light of the fact that only one-third of millennials owned homes at the end of last year.
For millennials who are considering or have begun their search for their first home, there are some critically important things you must consider before making what will likely be the biggest financial decision of your life.
1. Low interest rates: Whether entering the housing market by choice or by necessity, millennials will benefit from attractive interest rates, which hit a 14-month low in March. Lending standards have been relaxed over the last few years, requiring smaller down payments. Qualifying for a mortgage with a good job is not as hard as it used to be.
2. Owning a home is an investment that will likely appreciate over time: Think of it as a built-in savings account through which to build equity. Time is on your side. The tax benefits are significant too, due to the write-offs you may take for mortgage interest on loans up to $750,000, and on property taxes up to $10,000 annually. If you are renting a home, not only are there no tax benefits; you are also at the mercy of a landlord who can hike the rent.
There is one…