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Millennials may make up the single largest share of homebuyers among Americans, responsible for 42% of all new home purchases in 2017, but they aren't necessarily happy about it. In a new survey conducted by ValueInsured, a company providing down payment insurance for mortgage borrowers, only 58% of millennials believed buying a home was the best financial decision they could make for themselves and their family—a drop from the 81% who felt the same two years ago in a previous version of the survey. Worse, less than half of the 1,031 respondents (48%) believed buying a home today in America was a good investment, down from 77% two years prior.
For the vast majority of millennials feeling despondent about owning a home, the reason lay with high prices. Over two-thirds believe home prices are currently too high, and 85% expect the down payment on their home to wipe out more than half the total value of their personal assets. In fact, the financial strain these prospective homeowners feel purchasing a new home will place on them has convinced them they need to make some big sacrifices, including delaying having children (23%) or relocating to another, more affordable city (31%) in order to become homeowners. With the median price of a home at $218,000 in July 2018, an 8% increase from last year, it's small wonder many millennials despair over how they can afford to own their piece of the American Dream.
Coupled with a recent study of millennial homeowners by Bank of the West (headquartered in San Francisco), the findings from ValueInsured paint a dark picture of the attitude America's largest generation has towards homeownership. Bank of the West surveyed 1,014 adults last November and discovered 68% of millennials (defined here as adults aged 21 to 34) experienced buyer's remorse. That's a larger share than the 55% of Generation X and 35% of Baby Boomers harboring the same regret. When asked to identify what about their new house disappointed them, millennials reported damage to the house previously undiscovered and the cost to maintain a home as the primary culprits.
Chart and Data from Bank of the West
Anyone in the market to purchase a home, regardless of age, can help protect against buyer's remorse by making sure they've prepared themselves financially for such a momentous decision. And millennials may feel less apprehensive about homeownership if the rising inventory and slowing prices seen in some of the most desirable cities begins spreading to the rest of the country.
This Article, Why Millennials No Longer Think Buying a Home Is a Good Investment , was originally published on ValuePenguin .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
