For the past years, Utah has always made it to the top states to do business. Besides favorable tax laws, it is also rich in human resource—driven young millennials.
These members of the Y generation usually end up in the state for three reasons. First, they are taking advantage of the state’s excellent education. Second, they are children of migrants who might have come from another state or even country. Lastly, these are young professionals chasing after their IT dream.
Either way, the presence of millennials bodes well for the state’s economy. They are currently the world’s largest living generation. Their consumer preferences can significantly influence marketing efforts and even the types of products in the future. Most of all, they are usually innovative, purpose-driven, and creative. These traits can be any business’s assets.
But there’s a problem: many of them might not be able to afford homes in the state. That can work to your advantage if you’re planning to invest in real estate with FHA multifamily financing services.
Why Millennials Can’t Afford a Utah Home
In a new study by Best Neighborhood, it ranked 36th among the states with the most affordable residential properties.
In Salt Lake City, the costs of purchasing a house went up so high less than 50% of potential buyers can afford it. For those who already have a home, investing in another property might be a dream for now.
It’s also not showing signs of slowing down. According to Zillow, the market remains hot. The average home price is close to $390,000, and within a year, it may increase by 8.5%. The question is why.
Two factors are driving the exorbitant costs: population increase and limited supply. The latter is slowing down sales but doesn’t affect the value of the home in the market. That’s not all. Millennials also have their inner financial struggles.
First, a report by the Harvard Kennedy School Institute of Politics revealed about 42% of college students between 18 and 29 years old have a student loan. The average student loan debt, meanwhile, is already more than $33,000. It will take them years to pay this loan alone.
The 2018 study by Northwestern Mutual points to another debt source: the credit card. It is the biggest financial hurdle for the older millennials, who are 25 to 34 years old. These individuals are likely to end up with $42,000 of average debt, of which 25% will be from their credit cards. Only 16% will be student loans.
Offering Homes They Can Afford
Where does your future real estate investment fit in? The FHA loans will help you purchase a property with at least five residential housing units with a higher loanable amount.
Even better, depending on the actual loan you can qualify for, the loan-to-value ratio can be as high as 85%. It means that your down payment doesn’t need to be 20% of the purchase price. The interest rates are also cheaper than conventional multifamily loans. All these will translate to a more reasonable purchase, and you can pass on the savings to your target market.
It won’t be long before much of the state’s economy relies significantly on the millennials. You can help ensure that they stay here by offering affordable homes to them and their loved ones.