TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/615609
42 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T ORIGINATION THE LATEST Millennial Homebuyers Constrained By Rising Home Prices & Tight Lending Standards The data reviewed how fast 18 to 34 year-olds can pay off their entire mortgage loan, assuming that they paid 28 percent of their incomes toward the mortgage payment. H omeownership is an important aspect of the American way of life, and while many desire to own a home, the millennial generation often struggles to break into the housing market due to soaring home prices and tight lending standards. Credit Karma data released in November howed that rising home prices and tighter lending standard could "mean that for many millen - nials in America, owning a home feels like a far-off dream." But Credit Karma did show that there is a light at the end of the tunnel for millennials that wish to purchase a home. Using data from the company's 40 million plus member base that currently have a mortgage, Credit Karma was able to identify some cities where millennials could afford to buy a home and pay it off quickly. The data reviewed how fast 18 to 34 year-olds can pay off their entire mortgage loan, assuming that they paid 28 percent of their incomes toward the mortgage payment. Buffalo, New York took first place as the best city for a mil - lennial to purchase a home with it only taking them an average of 107.4 months, or 8.95 years, to pay it completely off. Meanwhile, Credit Karma's data showed that in Los Angeles, California, it could take this generation an average of 534.2 months, or 44.5 years, to pay off a mortgage loan. The 10 most affordable cities for millennials looking to buy homes (by average months to pay off a mortgage in that city): • Buffalo, New York, 107.4 months • Detroit, Michigan, 110.5 months • Cleveland, Ohio, 117.2 months • Toledo, Ohio, 123.2 months • Pittsburgh, Pennsylvania, 143.8 months • Garland, Texas, 144.6 months • Fort Wayne, Indiana, 146.3 months • Indianapolis, Indiana, 149.4 months • Memphis, Tennessee, 152.7 months • Milwaukee, Wisconsin, 153.6 months In late October, HUD Secretary Julián Castro, whose name has been bantered for months as a possible vice presidential candidate, joined Realtor.com Chief Economist Jonathan Smoke in a conversation about millennial housing held at George Washington University in Washington, D.C. Secretary Castro and Smoke addressed a number of questions surrounding America's most talked about generation and how they are faring in the housing market amid numerous regulatory changes. To begin the live stream, Smoke stated millennials outnumber the Baby Boomer generation by 8 million. He also added that they are the "present and future" of the housing market. According to Smoke, 32 percent of millennials were homebuyers this year, while 18 percent were sellers. On the one other hand, 40 percent of millennials own a home, while 60 percent rent. Secretary Castro then addressed some the recent changes that the Federal Housing Administration (FHA) has made to "open their credit box" to responsible borrow - ers, along with adjusting afford- ability. He expressed the importance of maintaining "safeguards in place, but opening up credit box so more millennials, who represent 68 per- cent of first-time homebuyers, have access to own a home."