America's attitude towards home-ownership is changing. Only 48 percent of millennials (age 21-36) believe that buying a home is a good investment, according to the latest ValueInsured Modern Homebuyer Survey. That's a record low, according to the report, and a sharp contrast to the previous high of 77 percent just two years ago.
Most of the respondents said they believe home prices are too high. The vast majority, 85 percent, said they expect a down payment to cost more than half of the total value of their personal assets.
In July, the median cost of homes in the U.S. was $269,600, up 4 percentfrom a year ago. New home sales, meanwhile, fell to a nine-month low. Because of high prices and limited supply, many prospective homeowners are struggling to find homes they like for prices they're willing to, or able to, pay.
In this survey, nearly a third of respondents said they'd need to relocate to another city to be able to afford a place. The same number didn't think they can continue to eat healthy while saving for a down payment, while a quarter said they would have to delay having children if they were to buy.
"Conventional wisdom assumed millennials were buying homes later because they chose to get married and have children later," said Joe Melendez, CEO and founder of ValueInsured. "New research now suggests homeownership may be the cause, not the effect, of delayed family formation."
According to an Urban Institute report, around 45 percent of Baby Boomers and Gen Xers owned homes when they were between the ages of 25 and 34, compared to only 37 percent of millennials. Around half simply cannot afford a down payment, the report found. That's largely because, compared to previous generations, millennials are burdened with more student debt and higher rents, which keep them from being able to save.
In the ValueInsured survey, 64 percent of respondents predicted that, if they did purchase a home, they'd probably feel buyer's remorse. That's a reasonable expectation considering a Bank of the West survey found that 70 percent of millennial buyers do harbor regrets, often because they feel they overspent on a down payment.
Still, other recent research indicates that the vast majority, 80 percent, of millennials do want to own homes. They're just constrained by the cost.
Is a home a good investment?
Expert opinion on the wisdom of investing in personal real estate is mixed.
While buying will you save money on rent, studies have shown that, if your priority is building wealth, investing in stocks and bonds can have a higher overall return, even as you continue to make rent payments. The London Business School and Credit Suisse found that, between 1900 and 2011, housing offered returns around 1.3 percent per year, after adjusting for inflation. The average annualized total return for the S&P 500 index over the past 90 years, by contrast, is 9.8 percent.
"A single family home is not an investment," CFP Eric Roberge tells CNBC Make It. "It may gain money over time, but if you're looking to invest, buying a single family home and then living in that home is not the place to do it."
"The way you build financial security is through real estate," he says, "and it starts by buying your first home."
Kevin O'Leary, an investor on ABC's "Shark Tank" and a personal finance author, splits the difference. He recommends buying a home only once you're settling into family life and want stability. "When you form a family and you're thinking of having, let's say, two kids, that's the time to start thinking about a home," O'Leary tells CNBC Make It, "because you know for about five-to-seven years you're going to be raising your children and you need a safe place for them."