In one of the most comprehensive reports we’ve seen about millennial attitudes toward home buying, Clever surveyed 1,000 millennials to discern their thoughts about homeownership as part of the company’s second annual “Millennial Home Buyer Report.”
And what they found – while not exactly surprising – certainly speaks to the difficulties that millennials are facing compared with their predecessors: 84% of millennials believe that owning a home is a critical part of the American dream. This is true, despite the fact that the number of millennials who own homes is 10% lower than the number of Gen Xers who owned homes at the same age.
Approximately 76% of millennial homebuyers’ parents owned a home when they were growing up, which probably influenced their view that homeownership is an essential part of being an American.
Since most of these homes are cheaper, millennials tend to buy homes situated outside of trendy urban centers, where prices have soared in recent years.
In their eagerness to buy homes, millennials will often put up with stuff that their Gen X and Baby Boomer predecessors wouldn’t: they’re willing to put up with higher interest rates, lease rent-to-own properties, buy near highways and waste facilities, and delay marriage and kids in order to afford a home.
Among the more shocking statistics: More than 25% of millennial homebuyers planning to buy this year have less than $1,000 saved.
And amazingly, nearly 25% of millennial homebuyers have more than $10,000 in debt (likely thanks to student loans). But that, apparently, isn’t stopping them from planning to spend $200,000 on a down payment for a home.
Unsurprisingly given their relatively little wealth, millennials are three times more likely to get help from a family member for a down payment than prior generations. Those who are getting help expect at least $10,000 in aid.
For those who don’t have help from family, saving for a down payment is the biggest obstacle to home ownership, and 30% of millennials will take on a second job to save up for a down payment.
Millennials are also more willing to accept a smaller home, a reflection of the fact that they’re hoping to raise smaller families.
Finally, millennials are nearly twice as anxious as boomers about home ownership, just another sign of their lack of financial readiness.
As they enter their 30s, many millennials are still wildly unprepared to take on the same responsibilities that their parents embraced (i.e. buying a home, settling down and having kids). That doesn’t mean they won’t ever own homes, it just means that their peak buying years are likely still years away.