New York City co-op and condo apartments remain out of reach for many millennials – that is, people in their twenties and thirties – primarily because of the difficulty of raising the standard down payment. The fact that it’s now a seller’s market isn’t helping matters.
"Some of the research that we've done shows that the No. 1 thing that 70 percent of millennials cite as their biggest obstacle is saving for a down payment," Grant Long, a senior economist at StreetEasy, tells Fox 5 News. "Overall in New York City, we generally see people put down 20 to 30 percent. It depends on your co-op board, can depend on your condo, can depend on your bank and your personal credit situation."
And then there’s the issue of buyers currently outnumbering sellers. "The housing market across the country is really healthy right now,” Long says, “so we're seeing prices at near all-time highs, nationally the average home value is about $200,000. In the New York City metro area, the average home costs twice that much, around $400,000. That is making it tough for millennials to jump into home ownership."
But help may be on the way. Mortgage giant Fannie Mae, which purchases many co-op mortgages from lending institutions, has announced that it is raising its debt-to-income ratio from 45 to 50 percent – good news for young homebuyers who are frequently saddled with college loans and other debt. In a related development, Movement Mortgage, a top 10 retail home lender, announced that it will offer zero down payment mortgages for qualified homebuyers. The loans are designed to be sold to Fannie Mae, which said in a statement that is working with Movement Mortgage and other lenders offering low down payment mortgages to qualified buyers, because those lenders are “focused on reaching more low-to-moderate income borrowers through responsible yet creative solutions.”
Thinking of buying a co-op or condo? Already bought, and not sure how co-op/condo life and rules work? Learn all about purchasing a place and living in your new community. It's not like renting, and its not like owning a house. What's it like?