When it comes to millennials, the $64,000 question is when will this generation be ready to start buying their first homes?
Unfortunately, say industry experts, no one really knows yet.
"These millennials came of age during the Great Recession, which showed them real estate is not always a positive investment," said Anita Domondon, VP of loan administration for Meriwest Mortgage, a wholly owned subsidiary of $1 billion Meriwest CU of San Jose, Calif.
Not Diving In
"Now they are hesitant to dive in. The millennials in the San Francisco Bay Area are making good money, but they are waiting, and there is a shortage of inventory — the lowest levels in seven years. I really want to watch the millennials."
With the San Francisco Bay Area continuing to remain a red hot housing market, Domondon said Meriwest tries to stand out by offering a number of educational opportunities. The CU hosts home-buying seminars and posts articles on its website — anything we can do to keep potential home buyers engaged.
"When they are ready to purchase their first home we want the connection to be strong enough that they will turn to the credit union," advised Domondon.
Meriwest also is issuing pre-approvals, and it is preparing members for the realities they will face.
Domondon said the first step is to make sure buyers have all documentation ready because when they make their offer they have to include a short close period.
"We are starting to see buyers waive contingencies to close quickly in a hot market," she said. "We can close in 10 days. We used to be able to close in seven days, but with the new CFPB rules we say 10 days."
Closing a mortgage loan so quickly is "stressful," Domondon acknowledged, but she said moving swiftly is something that "has to be done" to be competitive.
"What it means is everyone has to be in synch — Realtors, buyers, sellers, processors, the title company, the appraiser. We also have to be ready in case another offer falls through and our member is the backup offer. The early bird gets the worm. As realtors see the credit union being capable, they get more comfortable working with credit unions."