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Millennials approaching their peak years for home purchases and homebuyer income Feature Image
Posted on April 4, 2023 4 minute read

Millennials approaching their peak years for home purchases and homebuyer income

What's in this article?

Homebuyers reinvigorated by reduced mortgage rates
Recent weather a reminder to check your homeowner’s insurance

Although the difference between the cost of homes and the income of millennials is increasing, they’re now reaching their peak earning years. This time presents a crucial opportunity for them to buy a home. 

The median income of homebuyers between the ages of 35 and 44 was $120,000 in 2021, which is 30% higher than that of homebuyers between the ages of 25 and 34 ($92,000), and 103% higher than that of homebuyers under 25 ($59,000). 

Only Gen X earns more than millennials, with a median homebuyer income of $124,000, indicating that millennials’ purchasing power will likely increase.

This extra income will almost certainly be useful, as millennials spend more on home purchases than any other generation, despite earning less than Gen X. 

Individuals aged 35 to 44 had a median home purchase price of $425,000, which is 23% higher than that of individuals aged 25 to 34 and about 5% higher than that of individuals aged 45 to 54.

Homebuyers reinvigorated by reduced mortgage rates

In recent weeks, the reduction in mortgage rates has sparked a higher level of interest among potential homebuyers.

The Mortgage Bankers Association conducted a weekly survey that indicated a 2.9% rise in the number of new mortgage applications.

Since the Silicon Valley Bank implosion caused a stir of worries about a bigger banking crisis, mortgage rates have been declining.

According to Joel Kan, MBA’s vice president, and deputy chief economist, an upsurge in applications for mortgages has been observed due to the decrease in mortgage rates for the last three weeks. 

The 30-year fixed rate has gone down to 6.45%, the lowest rate in more than a month and the refinance index saw a rise of 5% from the preceding week.

However, that refinancing increase still lags 61% behind 2019’s numbers. 

Kan went on to explain that the majority of homeowners already have interest rates that are lower than current market levels, thus only a small portion of individuals have the motivation to refinance.

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Recent weather a reminder to check your homeowner’s insurance

Tornadoes have been in the news lately, with devastating damage spread over nine states and dozens killed. 

Hopefully, this is a problem that most homeowners will never have to face. But it’s also a good time to remind ourselves to check our insurance policies for wind damage coverage. 

FEMA issued a notice on its website detailing what most insurers look for when storm damage has occurred on one of their client’s homes. 

What insurers look for after storm damage

In the statement, they emphasized the differences between flood and wind insurance. 

For instance, did the gusts cause harm to the roof, allowing a large amount of rain to enter, or did an extensive flood surge into the establishment, destroying the construction and leading to the roof caving in?

FEMA points out that it’s important to identify the source of damage as insurance coverage may vary. Homeowners, renters, and businesses usually do not have coverage for flood damage but typically have protection from wind damage. 

In certain areas, separate wind insurance is needed to cover water entering a structure from wind-induced damage to a wall or roof. Flood insurance, on the other hand, is solely for flood damage.

After a severe storm, homeowners will have to contact their insurance provider to discuss the damage and submit claims. 

Damage from high winds

In cases of both high winds (that is, hurricanes) with speeds in excess of 74 mph and flooding, the insurer will typically assign separate adjusters to evaluate the losses and determine what is covered by the policy.

The process begins with adjusters conducting a room-by-room and line-by-line evaluation of destruction, creating a list of repair costs for each unit. 

A structural engineer is regularly required to help determine the beginning of the specific losses, giving the adjuster the ability to pinpoint the cause. 

Since high wind policies usually contain coverage for all kinds of damage apart from rising water and storm surges, wind and flood claim adjusters must collaborate to come to a consensus concerning what damages should be attributed to each policy.

FEMA added that if a tropical storm or less causes any destruction, your customers’ homeowner insurance typically will cover it.

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