There have been a slew of reports that outline the struggles millennials face as they attempt to step into the world of homeownership. Some choose to become renters while others move back in with their parents in order to maintain a level of financial stability. But according to a new study by the National Association of Realtors (NAR), there is one demographic of millennials that are bucking the trend — active military members.
- The National Association of Realtors released its first-ever "Veterans & Active Military Home Buyers and Sellers Profile."
- The study revealed that active military homebuyers purchase at younger ages (34), buy larger (2,000 plus square-feet) and more expensive homes ($226,000) than non-military buyers.
- Some of the determining factors include access to Veterans Affairs loans and a higher usage of real estate agents.
There have been a slew of reports that outline the struggles millennials face as they attempt to step into the world of homeownership. Some choose to become renters while others move back in with their parents in order to maintain a level of financial stability.
In the first-ever “Veterans & Active Military Home Buyers and Sellers Profile,” NAR found that while nearly all veteran and non-military homebuyers and homesellers use an agent, usage among active military members is “universal.” In addition to their high reliance on agents to get them through the home buying and selling process, active military members buy bigger homes at an earlier age.
The average active military homebuyer bought their first home at 34, six years earlier than non-military homebuyers. Moreover, 51 percent of active military members are homeowners, versus only 34 percent of their non-military counterparts.
“Despite having a lower median income ($76,800), more stable job security and no down payment financing options give aspiring homeowners in the military a deserving advantage over their civilian peers,”said NAR Chief Economist Lawrence Yun in a press release.
“Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option.”
Furthermore, active military members and veterans tend to buy large, more expensive single-family homes despite their lower yearly salary (compared to non-military buyers). Typically, active members bought 2,170 square foot homes that had a median price of $226,000. Veterans weren’t far behind with their home preferences. The average veteran bought a 1,980 square-foot home that had a median price of $220,000.
One of the reasons why millennial active military members and veterans are able to step in homeownership at higher rates is the availability of Veteran Affairs loans. These loans offer 100 percent financing and is the most popular choice for active members and veterans. Because of the 100 percent financing, military buyers are able to put down a down payment of 5 percent versus a 11 percent median down payment for non-military buyers.
Lastly, active military and veteran buyers rely on real estate agents more than non-military buyers (95 percent versus 88 percent) because they tend to move further away from their previous homes. Also, many military buyers have to find homes on short notice — something that is hard to do without the help of an agent.
“Many Realtors are veterans themselves, who understand the unique housing needs of those serving our country,” said NAR President Tom Salomone.
“Whether it’s relocating to a completely new area across the country or needing to sell their home in a short timeframe, Realtors are committed to helping active-service members and veterans succeed in their homeownership goals.”