Millennials say they want to own a home “some day” but do they…really?

The Urban Institute recently released a study on wannabe homeowners. It found that 37% of Millennials wanted to be homeowners, that 45.4% of Gen Xers wanted to own a home and that 45% of Baby Boomers wanted to own a home.

Here are some of the generational/demographic distinctions found by the Urban Institute that may sway or dissuade a potential buyer to pull (or not) the switch on homeownership.

  1. Marriage – increases likelihood of homeownership by 18%
    1. The median age of millennials who are married is close to 30 years.
    2. In 1960’s, the median age for marriage was early 20’s.
    3. Millennials are 3X more unlikely to have been married than those 70’s and 80’s years old.
    4. Just 57% of first-time buyers in 2017 were married, compared to 75% in 1985.
    5. Unmarried couples were 16% of first-time buyers in 2017. This is the highest percentage of unmarried couples who bought homes ever, according to the National Association of REALTORS®.
    6. Single moms and/or women were 25% of first-time buyers in 2017.
    7.  Children – having a child increases a person’s chances of owning a home by 6%.
  2. In 2015, 25% of married couples ages 18-34 who were homeowners had a child or two or more.
  3. In 1990, 37% of married couples ages 18-34 who were homeowners had a child or two or more.
  4. Median Credit Scores – higher scores translate into higher homeownership rates.
  5. Millennial median credit scores – 640
  6. Gen Xers median credit scores – 662
  7. Boomers – median credit scores – 728
  8. Ethnic diversity – Millennials are the most ethnically diverse of all demographics groups…ever.
    1. 39% of white millennials are homeowners.
    2. 5% of black millennials are homeowners.
  9. Student loan debt – the higher the student debt, the lower the chances of homeownership.
    1. Home ownership declines by 15% points when student loan debt increases from $50,000 to $100,000.
  10. Home owning parents – having home owning parents increases a person’s chances of owning a home by 10%.

Millennials reported that the main barriers to homeownership, as reported by the Urban Institute, are…

  1. Can’t afford the down payment – 53%
  2. Can’t qualify for a mortgage – 33%
  3. More convenient to rent – 28%
  4. Cheaper to rent – 26%
  5. Plan on moving soon – 24%
  6. Too large a financial risk – 23%
  7. Prefer to rent – 21%
  8. Looking to buy – 11%
  9. Other – 11%

Meanwhile, the Bank of the West just published research on millennials who had already pulled the trigger on homeownership. This study found that 40% of millennial homeowners were not happy with their decision to buy and that 68% of millennial homeowners felt buyer’s remorse about her/his decision to own.

Here are some of the reasons that millennial owners feel regret and/or buyer’s remorse about buying a home:

  1. Millennials overspent on their down payment. One third of those over-spenders dipped into their retirement accounts to do so.
  2. They underestimated ongoing homeownership costs. It’s a huge transition going from the fantasy of homeownership to the realities of homeownership.
  3. A full 50% of millennial homeowners had regrets about the house itself. 20% were frustrated by the damage found after they’d moved into the house.


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