We have made the observation lately on the growing number of millennial mothers pushing baby carriages while proudly displaying their latest baby bump. This can only mean one thing. It’s time to move out of the overcrowded apartment and into a real home. Great idea but as first time home buyers with loads of student debt and not much cash in the bank for a down payment, that’s two strikes against you even before you contact your favorite real estate agent.

It’s springtime and that is prime home buying season. Everybody engaged in real estate is standing by with their list of helpful hints. No matter what your needs are somebody has a top 10 list for the best and worst of everything.

The website Niche.com recently compiled their list of the best and worst cities for Millennials. Their criteria are supposedly based on availability of good jobs and affordable housing. It is a bit of a stretch putting these two features together. For example, their top 10 places include the likes of San Francisco, Cambridge Mass, Arlington and Alexandria Virginia. These cities had better offer great jobs because they are among America’s most expensive cities. In fact ultra high cost applies to 7 of Niche.com’s top 10 cities. Good luck following these recommendations.

Housing In Short Supply:

In the period following The Great Recession, housing has been in short supply and no matter where you want to buy, that is a bummer. If you take away the number of housing units that hit in the post 2008 foreclosure wave, housing supply is dictated by turnover for reasons like job changes that require relocation and new home construction.

For homebuyers neither of these two forces have helped their cause. Connor Dougherty at the New York Times authored an informative article recently. The title tells the whole story. It reads, “Real Estate’s New Normal: Homeowners Staying Put”.

New home construction has picked up more recently after developers have had a love affaire with rental housing construction for the previous six years. At the moment, there is a lot of catching up before any equilibrium is achieved.

Don’t Loose Hope

If all this so far sounds depressing, well it is. But not to loose hope for some things are happening to make first time home buying work for you.

The government is finally getting around to providing details of a plan first put together several years back. What this does is to lower down payments for certain first time homebuyers from 20% to as little as 3%. This program is controversial coming in the shadow of the 2008 financial crisis but then we are talking about a government that has a short memory.

The lowest cost way to finance is the 30-year FHA insured mortgage. The FHA has a cap on the amount they will insure. In the past the limit was a fixed amount of roundly $417,000. But new more flexible rules have been adopted. The new limits are based on prevailing market prices in each state. This is an important and welcome change especially in those top 10 cities in the Niche.com rankings.

It finally appears as though government policy is out to help stimulate the economy realizing the key role that housing plays in GDP. Is the ultimate solution? No but something is usually better than what their attitude has been since 2008.

Another hopeful sign is that the labor market is definitely getting much tighter especially for high skilled jobs in engineering and other technology related areas. Companies recognize that finding affordable housing can play an important role in landing prized talent. One real estate agent we spoke with claimed that Google was cutting deals with major developers in southern California to provide ultra low cost housing to employees and may even be considering moving some of it’s high cost workers from Silicon Valley to Silicon Beach. So don’t get discouraged first time home buyers.