A survey conducted by ValueInsured suggests that millennials who have entered the housing market are living in their entry-level homes longer than they would prefer. According to the survey, 85 percent of all millennial homeowners with entry-level homes would sell and upgrade if they could, but 78 percent of the same group say they are unwilling to do so with the current market valued at an all-time high.
This not only has made it harder for millennials to build wealth the old-fashioned way—buying a starter home with a mortgage, selling it, paying the bank back, then repeating the process however many times—but it has also had an adverse effect on the availability of affordable entry-level homes for the next generation of first-time homeowners. This situation is perceived as one of the major conditions underlying the problems with affordability in the housing market today.
Of those surveyed who say they cannot afford to buy their second home, 38 percent say that their chief obstacle is today’s high prices. Another 23 percent say they cannot afford a new mortgage because of higher rates, while 15 percent believe that they would not net a profit after all the costs are tallied in selling, upgrading, and moving. More than one in five, a sobering 21 percent, state that they believe they would actually lose money if they sold and thus are forced to stay where they are for now.
As this group of Americans remain in homes that they would rather leave behind, many are reportedly engaging in costly home improvements that may or may not serve them in the long run. This is due to the fact that, as they make these renovations, many homeowners may be taking out loans that leave them owing more on a home than they may be able to squeeze out of it later.