While many experts believe that high home prices and outstanding student loans have conspired to keep millennials out of the home market, a recent study predicts that this may soon come to an end. More than half of the 5,844 millennials surveyed by Apartment List nationwide said they plan on purchasing a home in the future.
“While millennial homeownership rates are low today, our study found that nearly 3 out of 4 millennial renters (74%) plan to buy a home in the future,” reports Andrew Woo, data scientist at Apartment List. The majority expect to purchase after 2018.
Woo notes that millennials are projected to be a larger cohort than the boomer generation this year, yet only 34.6% of Americans under age 35 are homeowners. “The future housing decisions of millennials will have a major impact on the economy,” Woo notes.
While current activity might indicate otherwise, millennials value home ownership. Among the survey’s findings:
- Only 9% of millennials expect to always rent; 17% are unsure.
- Older millennials (age 25 to 34) plan to buy sooner than younger millennials (18 to 24); 54% of older millennials plan to buy within the next three years vs. 37% of younger millennials.
- Marital status correlates strongly with purchase plans: 52% of married millennials plan to buy within the next three years vs. 41% of unmarried millennials.
- The desire to own a home is also tied to education levels: More than 77% of millennial renters who have a college degree (2-years, 4-years, and technical degrees) plan to buy homes vs. 67% of those with high school/GED degrees, and 63% of those who didn’t complete high school. (On the other hand, millennials with graduate degrees have fewer plans to buy homes than those with 2- or 4-years degrees — 72% vs. 77% — possibly due to the burden of student debt.
- Where millennials live makes a difference in their plans to buy a home. The highest rate of desire to buy a home was in: Cincinnati (85%), Austin (82%), Denver (81%), Atlanta (81%) and Washington DC (79%). San Jose was the lowest ranking metro area, with 53%, followed by Virginia Beach, Saint Louis, and Miami all tied with 66%.
Woo notes that it would behoove cities to court this demographic, as data from surveys suggests “that cities that foster positive local economic growth, provide safe environments, and create access to recreational opportunities have a better chance of attracting millennial renters and encouraging homeownership.”
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