Dive Brief:
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“It’s getting close to ‘now or never’ time” for homebuyers who want to sign contracts before mortgage interest rates go up, New York investment adviser Joshua M. Brown wrote in Fortune magazine, predicting that an influx of first-timers could make “the U.S. housing market …go ballistic this spring.” Brown is the CEO of New York financial planning firm Ritholtz Wealth Management, and he writes The Reformed Broker blog.
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Writing in Fortune, the author of "Backstage Wall Street" said millennials “are ready to bust out” of their expensive apartments and their parents’ basements, and start buying homes. He noted that job prospects for that age group have improved, and that average hourly wages for employees of all ages increased in January by 0.5%. “When people get raises,” he wrote, “they buy stuff and improve their standard of living.”
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He also pointed to relaxing credit standards that could allow more first-time buyers to qualify for mortgages.
Dive Insight:
The article doesn’t mention the drag that high levels of student debt and spiraling rents have on the ability of young adults to save for down payments.
Still, most housing economists have expressed similar optimism when forecasting what’s next for housing, saying that millennials can’t live with mom and dad forever and that the new option for lower down payments is bound to propel at least some of them to buy their first homes this year.