Active-duty service members are more likely to buy homes at a younger age than their civilian peers, and to buy larger and more expensive homes — despite having a lower median income, according to a new survey.
"Furthermore, their tendencies to marry and raise a family at an earlier age and carry less student debt make buying a home a more desirable and achievable option."
VA home loans are provided through banks, mortgage companies and other private lenders. The VA guarantees a part of the loan, which helps the lender provide more favorable terms to the borrower. The benefit helps eligible borrowers buy a home at a competitive interest rate, often without requiring a down payment or private mortgage insurance.
"Anytime one gets a small sample, outcomes have to be read with a little more care," said Yun, NAR's chief economist. "But even at 3 percent, it still provides information." The profile of home buyers and sellers is an annual project of the association, but this year, for the first time, questions were asked about whether the buyers and sellers were active duty or veterans. The NAR will look at trends over time as it continues to include these questions in the survey, Yun said.
The results of the survey point to the financial strengths of the military millennial population, said John Bell, assistant director for loan policy for the VA's Loan Guaranty Program. Loans to millennials made up 26 percent of all VA loans in 2015, he said.
The median age of veterans who responded to the NAR survey was 61; but according to VA statistics, 69 percent of the veterans who used VA loans in 2015 were 55 and younger.
Concerns have been raised over the past several years about whether active-duty and veterans are aware of their VA home loan benefit, and whether there are misperceptions among eligible home buyers, realtors and lenders that steer them away from using a VA loan.
But this survey, with 74 percent of active-duty home buyers and 54 percent of the veterans saying they used their VA loan benefit, tracks with the trend of increasing use the VA has seen in recent years, Bell said. In 2011, there were 186,588 VA loans to purchase houses. That number has gone up steadily since then to 322,115 in 2015.
Officials have made a number of improvements in the process for obtaining VA loans and have been working to educate veterans, lenders and realtors about the benefit, Bell said. But he added they want to do more to improve access to the program, in a variety of ways.
For example, VA officials are trying to get the word to lenders and realtors to ask home buyers about whether they are active duty or veterans as early as possible in the process, because it helps to make the process quicker and smoother, he said.
Although it's hard to quantify, he said, the general feeling in the community is there are more veterans who are aware of and understand their VA loan benefit. At a recent training in San Diego for lenders, he said, almost all noted how marketable the program is, and how its efficiency has improved.
Other findings of the survey:
- 77 percent of active-duty buyers were married couples, compared to 78 percent of veterans and 64 percent of those who had never served.
- The median price active-duty buyers paid for their home was $226,000; the median price all buyers paid was $220,000; it was also $220,000 for veterans.
- The median square footage of homes purchased by active-duty buyers was 2,170; for veterans, 1,980, and for those who had never served, 1,900.
- Active-duty home buyers are more diverse than the general population, with 27 percent identified as a race other than Caucasian; compared to 14 percent of veterans and 18 percent of those who had never served.
- 18 percent of the veterans who responded were first-time buyers; compared to 38 percent of active duty and 36 percent of those who had never served.
- Active-duty buyers’ priority is to buy homes near their workplace: 57 percent said convenience to work was their most important factor in buying, compared to 46 percent of buyers who had never served.
- More active-duty members used savings to help buy their homes: 74 percent, compared to 54 percent of veterans and 65 percent of those who had never served.
Karen Jowers covers military families, quality of life and consumer issues for Military Times. She can be reached at firstname.lastname@example.org.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.