Once upon a time it was easy to qualify for a mortgage; all you had to do was scratch X on the signature line and have a pulse. Now things have changed, banks have moved to the other extreme of the spectrum, demanding an incredible amount of information and making lending standards so stringent that most are doomed to be denied.
Millennials are also constrained by a terrible Job market, high levels of student and very little Job Security; all these factors simply make a tough job even tougher.Millenials are waiting longer to get married and have children; in some cases, they are putting off having children simply because they cannot afford to. Rents are surging so much that it’s forcing many to share an apartment or move in with their parent’s
“The mortgage industry is poised to experience a monumental shift as more millennial homebuyers begin to enter the market,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae, a mortgage software, and data company. “There are roughly 87 million would-be homebuyers in the millennial generation and 91 percent of them say they intend to own a home one day. Lenders must prepare today to meet their needs.”
“After more than a decade of growing concentration, we see that the millennial trend of increased downtown living has peaked out and is now beginning a decline,” Myers wrote. “This is a dramatic human interest story with great implications for cities and real estate investments.” Full Story
Bankers are nicely creating demand; when you deny someone from getting something, the simple act of denying them creates the desire to own this something even though they might not have wanted to own it in the 1st place. If you place obstacles long enough, you create a psychological need that even the person might not be aware of. In other words, once the barrier is removed, individuals who considered themselves sane will end up doing insane things. If we are correct, the bankers are planning on some way to lend money to the masses to create another massive bubble. The most likely option is the housing market since the American dream concept has been very well marketed and indoctrinated in the psyche of at least 80% of the populace. The American dream is to own a house or at least make it look like you own one. Most people forget that the house is not theirs until the mortgage is paid in full; until that point, they are nothing but glorified renters.
Simple Game Plan
Buying a home is not all it’s made to be; when you have a mortgage, you are nothing but a glorified renter until you pay the last cent. A better option would be to live 1-2 standards below your means, cut the things in your life that are not necessary and put all this extra money to work in the stock market. Wait for strong pullbacks to deploy new capital in the markets and focus on companies that have exciting products or high growth rates. With a little effort, you can easily earn over 10% a year and this money will grow into a far larger nest egg, then if you committed to owning a house.
The idea should be to focus on getting rid of your debt; millennials racked up all these student loans due to sheer stupidity. If they had lived within their means, they would not have had to face such problems. Surprisingly many still continue to indulge in luxuries they do not need even though they owe mountains of money to creditors. Hence, they deserve no mercy. They made their bed and they should sleep on it. Simple common sense rules can have then back on the right track in a relatively short period. However, sacrifices need to make and crap that they don’t need has to be cut out.
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