Homeownership Challenges For Millennials: How To Build A High Credit Score

Mar 6, 2024

Does owning your own home feel like an unachievable fantasy? Wealth Building Way is here to explain how you can make the impossible possible in its guide for millennials.

The goal for many millennials is to own their own home, but with the rising cost of living, soaring interest rates, and high student debt, homeownership may well seem like a distant dream.

As homeownership continues to divide generations, Wealth Building Way explains the very real challenges millennials face and what they can do to make owning their own home a reality. Find out more at https://wealthbuildingway.com/can-millennials-really-afford-to-buy-a-home-exploring-financial-strategies-for-homeownership/

The Challenges of Millennial Homeownership

The guide delves into the challenges of millennial homeownership, listing student debt, recession, and the COVID-19 pandemic as three contributing factors. According to data published by Forbes, millennials represented just 28% of all homebuyers in the period July 2021 - June 2022, largely due to their inability to save for a down payment. In its latest financial guide, Wealth Building Way explores the factors affecting homeownership affordability and what you can do about them!

According to Wealth Building Way, almost 70% of millennials are now priced out of homeownership due to rising house prices. Together with an increasingly competitive job market and stagnant wages, millennials, just like you, are finding it more difficult than ever to accumulate enough savings for a down payment.

As explained in the guide, there are many social influences at play when deciding to purchase a home. For example, societal expectations and peer pressure from friends and family can often push millennials into home ownership against their will. “Millennials must keep their goals, financial stability, and long-term plans in mind, says Wealth Building Way. “They should not be swayed solely by external influences or societal norms.” Purchasing a home is likely to be the biggest financial commitment of your life, so it is important to be 100% sure.

Home Affordability Strategies

If you have indeed set your sights on owning your own home, the guide provides a series of affordability strategies to make the process easier. For help with down payments, Wealth Building Way advises you to research various financing options, such as government-backed FHA loans.

If you think you will struggle to pay the traditional 20% deposit, Wealth Building Way explores the pros and cons of a lower down payment. “By opting for a lower down payment, millennials can enter the housing market sooner, but they may incur additional costs like PMI, generally ranging between 0.5% and 1.5% of a home’s value.”

Another recommendation listed in the guide is to consider the trade-off between location and affordability. Although urban living is the first choice for many, moving to a suburban area is often more affordable and comes with many other benefits such as increased space and a more relaxed pace of life. Similarly, you could consider purchasing a non-traditional home, such as a ‘fixer-upper’ or ‘tiny home’ to lower your upfront costs.

More Tips For Getting On The Property Ladder

Within the guide, you can also find tips for building a higher credit score, which typically results in lower interest rates and down payment requirements. Advice includes prompt payment of bills, paying off outstanding debt, and using a lower percentage of available credit funds.

Make your homeownership dream a reality with the latest advice from Wealth Building Way.

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