When the housing market imploded several years ago, its shock waves were felt around the globe. Though there was no doubt the aftermath would be evident for decades to come, no one could be sure of exactly how the bells would toll moving forward. At this point, some of the effects are becoming a little clearer with millenials receiving quite a bit of the brunt.
The Tides Turn
While millenials initially had little interest in purchasing homes, city life seems to no longer be the path they’re all following. Whether surging rental prices and the swelling cost of living in general sparked this change or the collective mindset simply took an unexpected turn isn’t certain; all market analysts know for sure is this particular generation suddenly generated an influx of home loans.
The Resistance Rises
Since millenials have only recently reached a point in their lives where home ownership is appealing, they’ve not yet established a noteworthy level of credit. Here, another element of the previously popped housing bubble comes into play. Still suffering from former financial ruin, lenders aren’t exactly forthcoming with loans for those they consider high-risk borrowers.
An Unbridged Gap
Hope isn’t lost for all millenials and the generations to follow. Reports from the real estate sector indicate about 33 percent of those currently applying for home loans are served by the FHA; of course, this leaves most of the remaining 66 percent out of the mix. Though a few have broken the mold and fit traditional lenders’ criteria, many have no alternatives at the moment.
In short, the issue at hand is finding ways of catering to the masses who fall outside any given parameters where income, credit scores and other factors are concerned. Unless lenders lower their expectations or additional assistance programs are developed, the nation may be facing a housing market crash of an entirely different nature during the years to come. If no one is qualified for a home loan, no one will be buying homes.
At present, more than 80 million millenials find themselves falling into the gap left by current restrictions. As more come of age and future generation follow suit, the numbers are sure to grow. Whether or not some compromise will be reached remains to be seen. Visit realtybiznews.com to gain a little more insight into this particular situation.