American homebuyers get more creative

02/10/2015

American homebuyers get more creative

NEW YORK – Feb. 5, 2015 – A 2013 MacArthur Foundation survey found that more than 70 percent of renters hope to be homeowners some day. However, with wages stagnant in recent years, would-be buyers have had to get creative in achieving that dream.

Co-buying between relatives or friends has been one emerging trend, as multigenerational homes are increasingly part of the mainstream. A recent Pew Research poll found that 57 million Americans – about 18 percent of the population – lived in multigenerational households as late as 2012, versus 28 million in 1980.

The trend makes a lot of sense for both the older and younger generations, says Charlie Young, president and CEO of ERA Real Estate. "We're getting a Baby Boomer generation that is aging and wanting to downsize," he says. At the same time, Millennials "might not have saved quite enough because we're post-Recession, and [they] might have college debt weighing on [them]."

Some parents are also buying homes and then renting them to their adult children.

Another way to afford homeownership is to obtain downpayment assistance. FHA loans, in particular, enable buyers to qualify for a mortgage with as little as 3.5 percent down.

Meanwhile, Freddie Mac and Fannie Mae recently launched their own low-downpayment programs.

Additionally, some Americans have the flexibility to move to cheaper parts of the country – especially those currently living in hot real estate markets that have priced them out. Communities in states such as as Arizona and Texas are seeing huge influxes of buyers thanks partly to lower home prices.

Source: U.S. News & World Report (02/03/14) Johnston, Susan

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