A recent survey showed Millennials to be nervous about rising interest rates, and much more so than other age groups. Undoubtedly, the burden of student loan debt hangs heavier on this cohort than others, and makes the thought of anything debt related stomach problems.
But, before everyone runs around like Chicken Little shouting “the sky is falling”, let’s consider what the latest interest rate bump from the Fed actually amounted to. The bump (maybe we would be better to call it a nudge) was less than ¼%. To put that in dollar terms, on a standard 30 year fixed rate mortgage of $100,000 a quarter percent nudge translates to an extra $10.57 per month (meaning one might have to skip stopping at Starbucks once every couple weeks if they want to get out of Mom & Dad’s basement).
Millennials certainly don’t need another reason to shy away from becoming home buyers. This past year saw the share of first time home buyers slip for the third consecutive year, and to hover at the lowest point in three decades. Millennials would normally be leading the first time home buyer charge. But for now, they remain nervous. To learn how to make your homebuying dollar go further, call me.