Home ownership has long been the goal for most Americans. Owning one’s own home has proven to be a wise investment returning a significant return upon resale in the majority of the past years.
In fact, it is the largest single asset that the average senior has, but the current home ownership rate of 62.9 percent is the lowest since its peak in 2004.
Unfortunately, many of the current millennial generation, or people age 18 to 34, have been forced to rent due to being hobbled by student loan debt.
For the college group, student loan debt alone is an average of $48,986 per household. Auto loans average $27,188 per household, while credit card debt only affects some 33 percent of millennials.
The main reason millennials cite for lack of credit card usage is the difficulty they witnessed with their parents during the last economic downturn from 2007 to 2010. More than 8.7 mil- lion people lost their jobs. Medium household income fell about $4,600 during this period. Unfortunately, incomes still fall some 3 percent behind the cost of living, which creates difficulty in saving for a down payment to purchase a home.
Currently, studies show millennials are paying 30 percent to 50 percent of their monthly income for rent. Many three-bedroom, two-bath homes in Hancock County are renting for $1,100 to $2,000 or higher per month.
One can quickly see that many millennials have quickly decided that home ownership is not possible for them even though 60 percent say they would prefer to own their own home. There is not a current government-insured financing program on the market to help this group with special financing needs. With college loans, car loans and lack of sufficient down payment, they are forced into a continued rental situation.
During the 1970s and ’80s, The Federal Housing Administration had a special loan program for first-time home buyers, which was eliminated in 2015.
That program permitted work equity for down payment which was as low as 1 percent of the sales price, adjustment to interest rates in the early years of the loan and other helpful benefits to fit the needs of the first time buyers of that time. Most buyers painted the home for the down payment requirement, and many times parents and relatives helped with the work.
A revised 235 program could be designed to fit the current needs of this era’s first-time buyers.
Housing costs in most areas are back to growing at record rates, with about 6 percent in Hancock County. A good workable finance program is needed to provide funds for millennials to enjoy the benefits of home ownership in this country. Sending a copy of this article to your congressmen along with your personal endorsement may make it happen. Let’s rekindle the American Dream.