Millennials make up a huge chunk of the home buying market; 32% of all homebuyers and 68% of first time homebuyers, according to a recent survey by the National Association of Realtors. But for many millennials, buying a home is not as easy as it was for their parents.
“Some buyers are struggling with affordability – citing factors such as underemployment, subpar wage growth, student debt and rising rents. All four make it difficult to save for a down payment,” states NAR Chief Economist Lawrence Yun.
One reason may be availability of low down payment financing. In many parts of the country, young families can purchase a median-priced home with as little as 3% down. In major metropolitan cities, however, where most people live, real estate is pricey. Low down payment financing is often not available on even a median-priced home. In these regions, access to down payment funds can be the biggest barrier to homeownership.
Those blessed with generous parents are sometimes able to find a way over the down payment hurdle. A new study by LoanDepot found that the number of parents who expect to help their children purchase a home has grown 31% over the last five years – rising from 13% to 17%.
For those who don’t have access to the help of a parent or relative, an equity investment of down payment funds from a third-party investor can present an attractive option.
REX HomeBuyer can double a buyer’s down payments funds. If a buyer has a 10% down payment, REX HomeBuyer can make it 20%. With more down payment funds available, buyers can consider a wider range of home prices, and buy the home they really want, today. REX HomeBuyer is an equity investment, so it requires NO interest or monthly payments from the buyer on the cash contributed. Instead, buyers share part of the change in value of the home, up or down, when they decide to sell, up to 30 years later. Buyers using REX HomeBuyer can also avoid paying mortgage insurance, and enjoy a significantly lower monthly housing expense. For millennials with good credit and sufficient income, REX HomeBuyer may provide the perfect financing solution.