CASSANDRA REPORT DIGEST
Insights from the Self Made Report
It’s often assumed that Millennials aren't buying homes because they don’t want to be tied down by ownership, but that’s merely a misconception. Many are eager to get on the property ladder and buy a home that they can customize and make their own, as revealed in our Self Made Report, and they're giving rise to new systems that make ownership more financially feasible today.
UNISON HOME OWNERSHIP
85% of U.S. Millennials want to own a home now or in the future, but achieving this traditional adult milestone is particularly challenging due to their financial circumstances and because home prices have risen in the past few decades, outpacing inflation. One company providing relief is Unison Home Ownership Investors, which pays up to half of the down payment of one’s home and reduces the monthly cost of a mortgage through a shared appreciation model. When one’s house is eventually sold, Unison gets part of the sale, thereby making money from the home, not the homebuyer.
Millennials aspire to build equity and often want the freedom make money off of their space by renting it out to others. Seattle-based startup Loftium reflects these desires by providing prospective home buyers with up to $50,000 for a down payment, as long as they rent a spare room on Airbnb most of the time in the first few years and share the income with the service. Homeowners don’t take out a traditional loan but rather pay back Loftium through a revenue-sharing agreement, with the company taking the hit if the room isn’t booked enough to generate the expected amount.
EAGLE HOME MORTGAGE
Only 14% of U.S. Millennials don’t want to own a home because they feel like it would tie them down, meaning it’s not stability that is deterring them but rather the cost, particularly that of a down payment. As a generation that entered adulthood saddled with student loans, many simply don’t have enough savings. In fact, one in four has had to delay buying a home because of student debt. Eagle Home Mortgage, a subsidiary of Lennar Corp., aims to alleviate their specific challenges and reduce the barrier to ownership by paying a buyer’s students loans off as much as 3% of the purchase price, up to $13,000.