Millennial Homebuyers Say They Are Willing to Make Sacrifices

The research shows that millennials are ready to make sacrifices to obtain homeownership this year.

And with 26% of them not having more than $1,000 in savings, sacrifices may be needed. A recent Clever Real Estate survey found 34% of millennials said they would lease a rent-to-own property to become a homeowner, while 21% said they would delay having children and 19% are willing to pay more interest. Forty percent of millennials said they would pay 6% interest, while 21% said 5% and 30% said 4%.

Millennials are also willing to live in less-than-desirable locations to become homeowners. Nearly one-quarter of millennials said they would live near a highway, while 22% said they would reside near a waste management facility.

What is motivating millennials to now take the leap into homeownership? One-third of millennials said they want to have or currently have a family, while 32% want more space. Twenty-four percent want to accomplish this financial milestone, while 20% each said needing more land or marriage.

“Millennials have had to push back a lot of costly milestones because many had the unfortunate experience of entering the workforce shortly after the Great Recession, leaving them unemployed or underpaid and they’re bogged down with more student loan debt than any other generation. So we’re finally seeing a large proportion of millennials hitting their stride in their careers, finally seeing stability that allows them to embark upon home ownership. As millennials continue to age, the younger millennials will likely keep this trend of millennial home ownership alive for quite a while,” said Dr. Francesca Ortegren, a research associate with Clever Real Estate.

However, there are features that millennials are not willing to sacrifice on. Forty-four percent said they want a safe neighborhood, while 19% said good schools are non-negotiable and 17% want to be near family and friends. Garages are also important to millennials, more than half said they are a “requirement” for a home, while 45% want a large kitchen and 41% want more space.

There are also some issues that millennials said would cause them to walk away from a potential home purchase. More than half said mold is a dealbreaker, 55% said no to pest or insect infestation and 52% said foundation issues are a no-go.

“I believe many millennials are at a point in their lives that they just want to reach those ‘life goals’ they’ve had in mind since they were kids. Many see owning a home and having a family as part of the American dream, and having to put that off might not have been what they planned for themselves. Now that the economy seems more stable and more millennials are in their 30s, they feel an urge to get on with their life. As a result, they’re willing to put up with a lot in order to own a home,” added Ortegren. “It’s important to note that millennials don’t seem to be making the smartest choices when it comes to buying a home: they’re not saving enough and many plan to put less than 20% down, for example. But their decisions do reflect their desire to have a home and family — both are traditional milestones that we didn’t think millennials wanted. It seems that’s not the case; they have similar goals to earlier generations, they’ve just had to wait to start working toward those goals for myriad reasons.”