Although 35% of home buyers can be classified as first-time buyers, there’s one demographic that is frequently left out of the homeownership conversation: millennials. But even though they have a number of obstacles to face — a lack of affordable housing and staggering student loan debts among them — many are determined to own property. Studies show that the average amount it takes to sell a house in the U.S. is $15,200.
Homeownership is part of the traditional American Dream, though it’s often a dream deferred for members of the millennial generation. Generally speaking, millennials are waiting longer to fulfill many major life milestones, including marriage and starting a family. Despite the fact that 2.4 million weddings are performed in the U.S. each year, it’s rare for millennials to get married young. It’s also rare to see millennials buying homes, though it’s not necessarily because they don’t want to become homeowners.
In fact, 55% of millennials say they’re interested in investing in real estate. It’s just that many have problems finding homes within their budgets. While 7.6 million millennials owned homes throughout the U.S. during 2015, a much smaller share of 20- and 30-somethings own homes as compared to Gen Xers and Baby Boomers.
But according to data, millennials who do not yet own homes are even more willing to make compromises in order to achieve this goal; roughly 85% say they’d consider a different city, 70% said they’d take a side job, and 83% said they’d cut expenses in order to save up for a home. And even though they’re saddled with debt, many are determined to find ways to own a home. Since 85% of U.S. homes were built prior to 1980 and are in need of improvement, many millennials are willing to go the renovation route so they can feasibly afford a house. Fortunately, some home builders are also finally starting to appeal to millennial buyers, who may be happy with a property with a smaller square footage in exchange for something in their price range. Still, many of these builders are still catering to older millennials and are creating homes that are simply too expensive for younger buyers.
Not surprisingly, that leaves many millennials stuck in rental housing. Rental demand during Q2 2019 surged by 11% from the year prior, an act that has increased rents by 3% on average nationwide, totaling $1,390 per month. In spite of this, 82% of renters seem to believe that renting is more affordable than owning, an impressive increase from last year’s 67% of respondents who felt the same way.
<>With the costs of rent and the costs of homeownership both on the rise, it’s no wonder that millennials with debt feel forced to choose the option that seems less expensive in the short term. Unfortunately, this trend might keep millennials from being able to purchase the homes they really want later on. But many millennials are still trying to make it happen; they’re just not always successful.