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Posted On: February 4th, 2015 8:59PM

Call them the prodigal millennials: Statistical measures and anecdotal reports suggest that young couples and singles in their late 20s and early 30s have begun making a belated entry into the home-buying market, pushed by mortgage rates in the mid-3% range.

Millennials are just tired of renting, tired of sharing with roommates and not having a place of our own.

The numbers adding up to buy now.

With the way rents kept on going, they realize it is time after years as tenants. they want to own, be able to make changes that suit them, not some landlord.

Many Millennials are part of the leading edge of this massive  demographic bulge that has been missing in action on home buying since the end of the Great Recession.

 Instead of representing the 38% to 40% of purchases that real estate industry economists say would have been expected for first-timers, they've lagged behind in market share, sometimes by as much as 10 percentage points. But new signs are emerging that hint that maybe the conditions finally are right for them to shop and buy:

They are sticking a toe in the water.

•The Campbell/Inside Mortgage Finance Housing Pulse Tracking Survey, which monthly polls 2,000 realty agents nationwide, reported that first-time buyer activity has started to increase much earlier than is typical seasonally. First-timers accounted for 36.3% of home purchases in December, according to the survey.

•Anecdotal reports from realty brokers around the country also point to exceptional activity in the last few weeks. Gary Kassan, an agent with Pinnacle Estate Properties in the Los Angeles area, says nearly half of his current clients are first-time buyers.

Assuming these early impressions could point to a trend, what's driving the action? The decline in interest rates, high rents and sheer pent-up demand play major roles.

But there are other factors that could be at work. There are key sources of financing for entry-level buyers — the Federal Housing Administration and giant investors Fannie Mae and Freddie Mac — have announced buyer-friendly improvements to their rules.

The FHA cut its punitively high upfront mortgage insurance premiums and Fannie and Freddie reduced minimum down payments to 3%.

Price increases on homes also have moderated in many areas, improving affordability. Plus many younger buyers have discovered the wide spectrum of special financing assistance programs open to them through state and local housing agencies.

Dozens of state agencies across the country offer help for first-timers, often with generous qualifying income limits.

 Nobody knows yet whether or how long the uptick in first-time buyer activity will last, but there's no question that market conditions are encouraging.

John Hacker

It just might be the right time.






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