Even though mortgage rates are at record lows, more Americans are becoming homeowners at older ages.
Age matters in military member home purchasing
Even though mortgage rates are at record lows, more Americans are becoming homeowners at older ages, particularly among millennials. Proving to be the exception to this new normal, however, are those currently serving in the military, further establishing why they truly are the few and the proud.
When it comes to the age at which Americans become first-time homebuyers, those who are in the armed services are more likely to buy at younger ages than their nonmilitary peers, according
“Military members typically buy their first home in their early 30s.”
Reported by a first-of-its-kind analysis from the National Association of Realtors. The median age that military home buyers purchase a home is 34. Among buyers who aren’t in the armed services, 40 is the median age.
Part of the reason active-duty service members spring for homeownership earlier may have to do with family dynamics. Military homeowners are more likely to be married with several children than those who own homes yet aren’t in one of the branches of the armed forces, the report discovered.
Buying a home often makes the most economic ‘cents’
What’s especially illuminating about this differentiation lies in what active-service buyers earn for a living, as generally speaking, they tend to have lower incomes, noted Lawrence Yun, NAR’s chief economist. Yet they also have some perks that make buying a home worth their while.
“Despite having a lower median income ($76,800), more stable job security and no down payment financing options give aspiring homeowners in the military a deserving advantage over their civilian peers,” Yun explained. “Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option.”
With mortgage rates well below the 4 percent threshold, financing a home is a smart investment. Based on the most recent numbers from Freddie Mac, 30-year fixed-rate mortgages average 3.6 percent, according to its latest Primary Mortgage Market Survey. These lower interest payments come in handy, as the median asking value for a single-family home is approximately $217,000, based on NAR’s data.
Even though the cost of rent is climbing, people are renting for longer periods of time than they did 40+ years ago.
Renters are renting much longer
“Renters are renting for six years today, versus an average of 2.5 years in 1970.”
Several studies point to Americans taking on the homeownership mantle later on in life. Versus the 1970s, Americans are renting two times longer today than they used to, according to a survey done last summer by home listings website Zillow. They’re also putting off wedding nuptials, as 40 percent of first-time homebuyers are married today compared to 52 percent in the late 1980s.
“Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,” said Svenja Gudell, chief economist at Zillow.
She added how one of the obstacles to first-time homeownership, for some people, is coming up with a down payment.
Skipping the down payment is one of the added benefits military members have, as several financing options allow for this. This may explain why Veterans Affairs loans are the most popular mortgage product both among those who retired from the armed forces or are still active, according to NAR’s Veterans & Active Military Home Buyers and Sellers report. Just 5 percent of veterans and those still serving say saving for a down payment is difficult for them.
If you’re looking for funds to make a downpayment on a house or any other reason, you can request a loan through Reliable Military Loans in minutes!