Less than 40% say they can afford a down payment
By Kelsey Ramírez, HousingWire
Many Millennials say they want to buy a home, however they are concerned with their ability to save for a down-payment, according to the Housing Confidence Index from ValueInsured, a provider of down payment protection for homebuyers.
The survey was conducted online by Equation Research in September 2016 among, they claim, a nationally representative sample of 1,013 American adults ages 18 and older.
Millennials are more likely than other generations to expect a price bubble and correction in the next two years with 60% of Millennials versus 47% of the total American population.
Prospective first-time homebuyers in particular are nervous about market instability – only 25% of these Millennial non-homeowners are confident that the 2008 housing crisis will not happen again in their lifetimes, according to the index.
With that said, 70% of Millennials still say the American Dream is alive and well, they just describe it different than previous generations. They prefer to own a home, but don’t want to be tied down.
In fact, 83% of Millennials claim that their definition of the American dream is “owning a home on my own terms while staying mobile, agile and financially secure.” About 81% of Millennials plan to live in their current home for less than five years.
The index shows that 76% of non-homeowners want to buy a home, however only 38% are confident they can afford a down payment.
And it’s no wonder. In some areas, the lack of affordable housing is making it much more difficult for students to continue in their career, much less buy a home after they graduate.
Student loan debt is playing its biggest role in the mortgage process yet, and it doesn’t look like it’s changing anytime soon. After all, many Millennials have yet to finish college, and the tail end of the generation is barely 18.
But some experts say that while student debt has a bigger role, it’s not necessarily the worst thing to ever happen to housing. Here’s why.
Either way, like it or not, Millennials are currently the largest generation, and the future of housing. According to Freddie Mac, they are the key to improving the homeownership rate.