younger home buyersThe ages of the borrowers at the high end of the market have started to decrease. A study conducted by a reputed online agency states that the median age of borrowers towards the high-end of the market was around 38.5 years in the second quarter of this year.  The previous quarter, the median age was 41. As for the age back in the year 2011, that was around 50. All these buyers took loan amounts that are greater than $417,000.

Age is not the only factor, which has experienced a decline. The same can be said for the credit scores, which implies that lenders may have somewhat loosened their requirements. This year, the median credit score for these borrowers has been noted at 764, and the same value was observed last year.  In 2012, the scores were around 770 and back in the year 2011, they were as much as 785.

The data which the report analyzed is focused on the lower bracket of the luxury real estate market. Still, it does indicate that the sales of high priced homes have increased.  In the month of April this year, over 2% of the total sales were for houses, priced greater than a million dollars. According to the chief economist of the company, which has conducted the survey, this is because of the gains in the stock market.

The real estate market is recovering, which has helped buyers in all brackets of the market, particularly the higher end.  Even the young home buyers have started to utilize jumbo loans, but the industry experts feel this market is more suitable for the baby boomers and will still rely on them in the long term. This is because these people have more equity in both the stock market and their homes.

Some economists also feel that there will be reduced borrowers of jumbo mortgages in the next few years. The younger generation who will reach this age in the time to come, is burdened by student debts and have no great job prospects. Even if they start earning impressive paychecks, they will still have obstacles to face. These can be removed only when they build equity through the multiple real estate transactions.

Let us see how well these young millennials fair when it is their turn to be boomers.


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