The red-hot housing market is pitting different generations against each other. Mark Johnson - CEO of JPAR - Real Estate says at first glance, it's an even competition. "There are 71 million Millennials coming into the real estate market. Contrast that with 73 million Baby Boomers." Wanting to take advantage of current low interest rates, Millennials are pushing prices higher and higher, but they may be indecisive. Johnson: ""The Boomers are more competent in financial knowledge and what they want and where they want to live --- and that's an advantage!"
Borrowing from Mom and Dad to Buy Their First Home?
Add to that Boomers have equity in their current homes, no student debt or children at home. The two groups are often competing for the exact same homes, according to Cathy Baker of Baker Mortgage. Baker says, "You would consider a younger first-time home buyer would be in a lower price range -- but --- I'm doing pre-approvals for first-time-home buyers who are spending $400,000!"
she says after all, if you were selling your home, whom do you want to buy your house: a first time buyer who must be approved for a mortgage with a 10% down payment - or an experienced home owner who is paying cash or at least a much larger down payment and longer credit history? "The younger buyers are being beaten out all over the place by older buyers who have more cash and experience."
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Baby Boomer Home Buyers