It's not that millennials don't want to buy houses, it's just that they have a lot of trouble affording them. That's according to ValueInsured’s quarterly Modern Homebuyer Survey, which states that 77 percent of millennials want to own a home.
Millennial homeownership is barely 35 percent, the lowest level since the U.S. Census began tracking homeownership by age groups in 1982 according to ValueInsured.
The problem, ValueInsured reported, is that millennials might not be saving enough money towards home purchases. Yes, there is a robust economy and strong job market, but, the report stated, this group of homebuyers faces a lot of competition for their money, from needs like cell phones and student loans to lifestyle expenses like Uber rides and live events.
According to the report, 72 percent of millennials who wish to buy a home save less than $250 a month. In Q4, the national median home down payment was $18,000.
“This number includes rural area homes where prices are on average lower, and where millennials are less likely to be looking to buy a home,” the report stated. “So, it will likely take more than six years for most millennials to save for a down payment.”
Nevertheless, a third of millennials surveyed said they would seriously consider moving to a less expensive market in order to buy a home sooner. And despite reports of lavish spending on live entertainment events and dining out, “28 percent say they are willing to give up cable, and 22 percent say they are willing to eat cheap ramen noodles daily in order to afford to buy a home sooner,” the report stated.
According to ValueInsured, 41 percent of millennials said they would count on down payment help from parents and in-laws. But whether leaning on family help is because they can't save enough or they are not saving enough because they know they will receive parental help is not known.
Whatever the reason, the report stated, one consequence of them not owning houses could be of the political variety. Nearly a quarter of millennials—the largest demographic since the (quickly diminishing) Baby Boomers—believe more politicians will find they need to promise and deliver on affordable housing in order to win future elections.
“The next generation of homebuyers has a monumental challenge and they need a solution,” the report concluded. “Organizations, policymakers, and innovators that can help millennials solve this problem, save enough to buy a home sooner, and to help them preserve those savings will be more likely to stay competitive in politics, business and beyond.”