A new Bankrate survey revealed that almost half of millennials consider cost of living as one of the biggest barriers to homeownership.
The survey results indicated that 45% of millennials, ages 23 to 38, identified cost of living is a hindrance for homeownership while only 38% from Gen X, ages 39 to 54, and 31% of baby boomers, ages 55 to 73, say the same. Another barrier that the survey discovered is student loan debt, which currently stands at $1.6 trillion. It showed that 23% of millennials find student loan as a hindrance compared to 15% of Gen Xers and 5% of baby boomers wanting to buy a house.
The Bankrate survey determines the ability of Americans to save for a downpayment and closing costs, as well as their knowledge of minimum requirements amidst the lack of affordable housing in the country.
Among the key findings of the survey were that 53% of millennials are most likely to save their own downpayment money compared with 47% of Gen Xers and 45% of baby boomers, and that on average, millennials needed three years to save for this while Gen Xers only needed 2 years and 9 months and baby boomers needed 2 years and 6 months. It also revealed that 51% of adults in the U.S. do not have knowledge of the minimum down payment required to buy a home.
According to Bruce McClary, vice president of communications with the nonprofit National Federation for Credit Counseling, "People of all income levels transition from renting to homeownership, even in housing markets that seem more challenging than others. Credit issues are another area of misconception because people assume their credit doesn’t meet the right guidelines. It’s not a permanent impediment (to homeownership).”
Meanwhile, Jessica Lautz, vice president of demographics with the National Association of Realtors (NAR), pointed out "Wages simply aren’t keeping pace with home prices." This statement is supported by NAR data from March, which indicated that from 2012 to 2018, house prices increased by 47% while wages only went up by 16%.
