- Millennials want to own homes, but nearly half can’t afford to save for a down payment because of their crippling student loans.
- It’s predicted that some millennials won’t achieve homeownership until they’re pushing retirement age.
- Property companies have been buying foreclosed single-family homes to accommodate millennials who can’t afford to own homes.
The economic choices made by millennials have shuttered decades-old businesses and shifted ideologies. The generation tends to spend their money according to environmental issues, and eschew physical possessions in favor of memorable experiences. Still, there’s one piece of the American pie that millennials do want but which remains out of reach: homeownership.
Around 89 percent of millennials plan to purchase a home in the future, according to a survey conducted by Apartment List. But the survey’s results indicate that for millennials, saving up for the requisite 20 percent home down payment is stymied by a mountain of student debt.
Millennials Might Not Own a Home Until They’re Near Retirement Age
Student loans are such a pervasive problem that 48 percent of millennials reported carrying student debt for themselves or someone else, according to an AARP and AYA survey. So it’s not that this generation doesn’t want to own homes, it’s that millennials can’t afford them.
Of the 6,400 millennial renter survey respondents, nearly half don’t have a cent saved for a down payment and just 11 percent have saved $10,000 or more. Based on the data collected, Apartment List projects that two-thirds of millennials would require more than two decades to save a 20 percent down payment based on their current savings rates.
To emphasize that point, homeownership for older millennials wouldn’t be achieved until they’re well into their 50s.
Attention, Millennials: Why a Slow Spring Housing Market Could Be a Boon for Buyers
Effect on the Housing Market
Millennials are poised to overtake baby boomers and become the largest generation. But with the second-largest generation delaying homeownership, the housing market’s proportion of homes available to buy and to rent will soon become out of whack.
Landlords and rental property holding companies see the writing on the wall and are feverishly buying up foreclosed homes and single-family properties to accommodate the swaths of millennials who desire the suburban sprawl but can’t afford to own one, the Wall Street Journal reported.
Keep reading to see the most and least affordable states for millennials to buy homes.
More on Real Estate
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- 6 Reasons Why Women Are Struggling to Buy a Home
- Watch: Even Beyoncé and Jay-Z Mortgaged Their $88M California Mansion
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