Millennials finally embracing American dream of homeownership

DETROIT – Chris Pawlowski, 26, packed up the dreams of many millennials when he moved into his condo in suburban Detroit this spring.

He wanted to put down some roots, but he's still young enough that he really did not want to be stuck far away from the action. So he moved exactly where he did so he could keep enjoying his weekends hanging out with friends at nearby hot spots. And he's painted his kitchen a very bright Explorer Blue to make the place his own.

Pawlowski, who graduated from Oakland University in 2012, works for Ford Motor Co. as a business analyst involved with information technology systems. He wanted a reasonable commute to work. He didn't want something built in the 1960s or earlier that needed expensive repairs. He knew certain towns were out of his price range.

"The main challenge was basically finding something newer," said Pawlowski, who looked for more than a year and ended up buying a condo built in 1994.

Everywhere he looked, he'd ask: "Is this something I really want?"

For years, we have heard that millennials really don't want to become homeowners. Theories have included: They have too much student-loan debt to juggle a mortgage. Or they are too skeptical of the American dream because they watched the massive foreclosures that hit when some were just in high school.

But while millennials aren't likely to do things the way their parents did, it's increasingly becoming clear that they aren't going to rent or live in their parents' basements forever, either. Millennials are beginning to see housing as a way to invest and build equity now that home values have recovered after the housing collapse.

"After years of staying put and sleeping on the couches of relatives, the younger population is on the move again," Swonk wrote.

The challenge, millennials say, is finding something that doesn't need thousands of dollars in updates. Millennials don't want to deal with dust, dirt and dated kitchens.

The spring homebuying season is expected to be one of the busiest and most competitive in recent years. Nearly 3 million first-time home buyers are expected to enter the housing market in 2017, according to TransUnion.

And younger consumers will likely represent the majority of new home buyers.

"They do aspire to be homeowners, even if they have not entered the market," said Jessica Lautz, managing director of survey research and communications for the National Association of Realtors.

Another important factor driving millennials into homeownership: They have jobs — and in some cases, pretty good jobs.

Mark Zandi, chief economist for Moody's Analytics, said job growth has consistently been stronger among millennials in recent years compared with other age groups.

The millennial unemployment rate fell to 5.25 percent in April, down from 5.38 percent in March and 6.28 percent in April a year ago.

"Millennials' good job prospects should make them good home buyers, despite the heavy weight of student loan debt this generation is struggling with," Zandi said.

Hilary Lynch, 27, said she started looking about a year ago to buy a home once she found a good job where she wanted to build her career. She works at Bosch Engineering North America and wants to keep working in the area.

She was paying about $750 a month to rent the second floor of a house in Ann Arbor, Mich., — which she says was "ridiculously low for Ann Arbor standards."

But she noted that her mortgage is $850 a month for the three-bedroom, 1,900-square-foot ranch home she bought in February in a suburb closer to Detroit.

"My mortgage isn't much more than my rent [was]," she said. "I'm building equity. I have a house that is four times the size of my apartment. I can paint the walls whatever I want. I can make it my own."

Mortgage payments, given low rates, are still cheaper in many markets compared to rents. Bob Walters, president and chief operating officer for Detroit-based Quicken Loans, said rents have been rising somewhat faster in many areas, so millennials are finding that it makes economic sense to buy a home.

Lynch kept her payment low, as well, because she was able to put down 20 percent on the home that she bought for $225,000.