A new generation of homebuyers may shatter the myth that millennials are serial renters, according to a recent survey by As cited in the survey: 61 percent of first-time buyers in the coming year will be under the age of thirty-five. It appears that despite student loans, credit card debt, and near-stagnant wages, the millennial generation is setting down roots and eschewing rent payments. But this does not mean they are looking for the one dream house to last a lifetime.

Millennials overall are saying goodbye to the idea of a "forever home."  The old concept of buying a home at 25 and living in the home well through retirement may have seen its last days. The antiquated idea of buying that dream house and living there forever is one the millennials do not uphold. A recent community survey shows that over half (56 percent) of homeowners no longer believe in the forever home. 

A recent study found that fifty-eight percent of millennials believe that the forever home is dead, and expect their home to evolve as their life does. From a growing family to a new job or a lifestyle change (goodbye concrete jungle and millennials want their living situation to be adaptable.

According to the survey, a third of millennial buyers intend to live in the next home they buy for less than 10 years, and 80 percent are equally or more interested in a newly constructed home over a resale home.

The 30-year fixed rate mortgage is not the only option. An ARM, or adjustable rate mortgage,  can make a lot of financial sense for many homeowners, including millennial homebuyers. Let’s examine some of the details and advantages of 3/1 and 5/1 ARMs.

The interest rate on a 3/1 or 5/1 ARM loan will be fixed for either three years or five years. After the fixed rate period expires, your rate can go up or down, depending upon the market. But as noted above, you do not have to fear your rate skyrocketing 10 points.

There is a cap in place. Usually, a rate adjustment cap will be in the area of 5% above your current rate, or possibly 2% or 5% per each adjustment period. So, if your rate is 3.5%, your adjusted rate may not go above 2% or 5% per year, with a total maximum of 5%.

A major advantage of an ARM is that you will pay a considerably lower rate than a fixed rate mortgage. So, you will have a lower payment during the fixed period. This is advantageous for many young buyers because they are probably just starting out in life. They may have a lower income in their 20’s and want to save on their monthly payments.

  There was a time when many families stayed put in one city or one home for life. Times have changed a great deal in the last 30 years. Today, many young home-buyers are moving around every few years. If you are going to be selling your home in a few years and possibly moving to another city, getting a 3/1 or 5/1 ARM is logical.