Are you a first time home buyer and/or a millennial looking to buy a home? It is more difficult to buy a home these days? In this episode, we discuss millennials and home buying in 2019 and if it's harder for younger people to buy a home today than it was 5 or 10 years ago and why. We also explore if they are waiting longer to buy a home, stay in their homes longer and if there are any regrets when buying.
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Hi everyone, I'm Karl. Welcome to another Homebuyer's School video, a channel where you get the latest strategy, tactics, and tips from home buying experts. And remember, if this is your first time on this channel [00:00:30] and you want to get the latest strategies from the experts, hit the subscription button below, hit the little notification bell so you don't miss anything.
So, today I'm joined by Kevin French, Realtor with RE/MAX, and the question we're going to answer today is, well, actually, the topic we're going to cover today is millennials and home buying in 2019.
So Kevin, I guess the first question I'm going to ask is:
For younger people, is it harder to buy a home in 2019 than it was five or 10 years ago?
Most of that comes down to mortgage rules [00:01:00] and changes with those, you used to be able to get a mortgage, let's just simply put it, a lot easier.
And the mortgage rules are continuously changing, one of them being, the latest one being the stress test, so, actually paying a mortgage at X percent, but then being approved at two percent higher than that, which significantly impacts people's affordability.
Karl Yeh: And
Are you finding younger people today are waiting longer to buy their first home?
Yes, one reason, obviously it's free to stay at home.
[00:01:30] Then, the other option being, that you want to have a significant down payment, you need, of course, a minimum of five percent.
But wanting to have more than that, if you don't have any other rent to pay in the meantime, and you can increase that, and then lower your mortgage payment ultimately, then, that's not a bad idea.
Regrets on buying a home?
Have you also found that some people have... Have you found anybody that's maybe had any regrets, say, buying a house?
Not really, no.
I would say that the reality [00:02:00] is, you're going to pay to live somewhere, so you're either paying, you know, whatever it is, $1000, $2000, $3000 a month to-
Rent a property, whether it be a condo, or a townhouse, or a single family home, or you're going to be paying a mortgage and then building equity in the property.
Ultimately, when you go to sell the property the market could have gone up or down, and then you'll have to adjust there, but even with Calgary's declining market over the last handful of years mortgages have still...
People who purchased a home five years ago are still better off on the whole than renting [00:02:30] as the alternative.
And remember, if you want to know more about the advantages of owning versus renting, check out our video above, and the description below.
First time home buying tips
So, for those first time homebuyers who maybe have that hesitancy to actually buy a house, and what are some kind of tips that you would provide, in terms of, when they were considering buying a house?
Consider, let's say that they wanted to make a lateral move, and they wanted to purchase a property that was similar to the one they were renting, understanding what the price of that would be, and getting [00:03:00] themselves, obviously, set up with a mortgage specialist, and then getting on track financially to ensure that they're able to move forward with that purchase.
And then, maybe meeting up with a few different realtors, finding one that they want to work with, and then seeing those properties.
They don't have to purchase the first property that they see, but getting a better understanding of the market would be quite important for them to decide if that's the move that they want to make, or if they want to continue renting.
And, is there any other tips you have, in terms of, must haves that people... Like, more [00:03:30] of requirements that you should have before buying a house?
Requirements they should have before buying, can you elaborate?
So, more like, do they have to have a specific credit score? I know the down payment's five percent right?
Should they have more?
Should they be in a financially good position, such as, like a steady job, or like, should they just go buy a house?
Like, what are some of the things that you should generally have before you actually go make that purchase?
Yeah, make sure you have a [00:04:00] steady income.
A good job, and stability.
Understanding that, you know, where your relationships are at, where your career is at, and then making sure that you're moving forward, intend to stay in the property for a longer period of time.
I wouldn't say that it's typically a short term investment.
So if they are going to move forward and purchase, the intent should be to live in that for a longer period of time, yeah.
Do younger people stay in the homes they buy longer?
Do you find younger people, like in terms of when they're buying a house, do they stay there for a longer period of time?
Like you said, like you should stay there, or is it sort [00:04:30] of like a high turnover in two or three years? It's-
No, on average in Calgary it's five to seven years, which is, where I intend to buy, longer period of time.
I guess it's not the longest amount of time, but at that rate they'll be able to purchase the property, move in, live comfortably for a handful of years.
And then if they do end up selling the costs of selling should be outweighed by the advantage of living there for the last five to seven years.
Question of the day
So, the question of the day I have for you is:
If you are a first time homebuyer what are some of the tips that you would provide your younger self when buying a house?
Let us know in the comments section below [00:05:00].
If you want to know more about home buying check out these videos, and don't forget to hit the subscribe button so you get information straight from the experts.
Thank you for watching, we'll catch you next time.
Let us know if you have additional mortgage or financing related questions that we can answer by submitting them in the comments section below.
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About Kevin French:
Kevin French is a Calgary and area based realtor with a client focus. He specializes in a stress free home selling process that is built on customer service. Understanding that your home is one of your largest investments, Kevin employs a marketing mix that ensures you will maximize returns on your home sale. Diligent market research coupled with an in-depth understanding of the Calgary and area markets, allows Kevin to pinpoint the perfect price for your home.
In addition to perfect pricing, Kevin offers a suite of additional services such as professional photography and an interior designer to ensure your home shows its best. Kevin French has become a trusted name in real estate because he is results driven and works closely with his clients to produce the best results.