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Is The Timing Right To Buy A First Home?

millennials on roof

China Trade War is good for lowering mortgage rates in the US if you consider the timing of the latest round of interest rate drops. So what does this mean for first home buyers and is it the right time to purchase your first home?

Millennials aka Gen Y are a generation of people typically born between the early 1980s and mid-1990s. They are the wave of potential first home buyers who are on the lookout for a great property purchase. To get it though everything needs to align for them, including best mortgage interest rate, lowest property price, job security, and an excellent overall economic outlook.

So let’s look at the current environment and see when first home buyers will be making a move into the property market.

Mortgage Interest Rates

The China Trade War is offering up some nervousness in the markets, and many investors are choosing safer assets like bonds; therefore mortgage lenders need to work hard to keep their interest rates competitive to keep the business with homeowners.

A good drop in interest rates has seen a spike in remortgage applications and also an increase in new purchase applications compared with the same time last year. Lower rates are helping first home buyers into homes, so arguably this box is ticked for millennial buyers.

Property Prices

Property prices are attractive to buyers in peripheral areas but not where the majority of interest lies, i.e. the towns and cities.

In fact, CNBC reports higher prices for real estate in the lower end of the market, is restricting the supply of listings, so there has been lower than usual sales activity for this time of year compared to previous years, and this is not great news for millennials.

However, if motivated buyers are willing to move out of the leading centres, there’s more housing stock for sale. House hunting is never straightforward; it requires the home buyer to put in the hard work to find the right property.

There is no escaping the need to do extensive research on location, comparable real estate prices, and capital gain potential for the buyer. Therefore the challenge of higher property prices shouldn’t put off millennials from looking for their ideal first piece of real estate.

So this leaves the overall economic outlook and job security for everything to align for homebuyers to get back into the market in a big way.

Economic Outlook & Job Security

The balance reports the economic outlook for the US is good. GDP growth rate is between 2% and 3% so with business confidence in many sectors holding up, this is the job security box also be ticked too.

Not So Fast

With almost all the apparent borrowing factors favourable, Millennials can up the ante on their house hunting, or so we believe. What will hold back many first home buyers is the shortage of starter homes, in their ideal location.


Only the genuinely motivated first home buyer will move mountains so to speak to get onto the property ladder and sadly this is not the majority.

The thought of moving from their favourite city or taking on the extra commute to and from work is a step too far, so the status quo of their living arrangements is preferred.

Another reason to delay the home purchase is the desire to stay in the comfort of the family home. Many adults between 25 – 35 years of age (yes, these are the Millennials) still live with their parents, and it’s hard for them to leave the nest so to speak.

It’s not all doom and gloom, over the next ten years, a wave of Millennial home buyers will offer up optimism to mortgage lenders.


Research from Zillow says around 45 million Millennials will potentially be in the market for their first home so in readiness construction on more supply of starter homes should get underway now and that will work wonders for the economy and job security in that sector.