Why Millennials Can't Afford to Buy Real Estate
More and more young people cannot afford or qualify to buy a home today, and it's not because of real estate prices.
Thanks to new policies by the Federal Government, mortgage costs are way higher than they need to be.
- First the Government set a qualifying rate of 4.8% for mortgages. Did you know that you can get a 5 year fixed rate mortgage for under 3%? Think about it, we don't have qualifying rates for credit cards or car loans, maybe we should.
- Next the Government introduced new rules for insuring mortgages that eliminated many lenders for borrowers. Only the banks were able to do these types of mortgages. The end result has been that banks have increased both their market share and the interest spreads on mortgage rates this year. With less competition, consumers get to pay way more.
So interfering with the market is never a good thing. Don't blame us for unaffordability issues.