A new survey from Real Estate Witch, the online publication that connects readers with expert real estate advice, shows that millennial homebuyers can’t catch a breather, and that among the top barriers to owning a home are inflation and your debts.
“After weathering two economic downturns that delayed their ability to buy a home, they entered one of the most expensive markets in US history,” the Real Estate Witch report says. “Fierce demand fueled by record low interest rates and limited inventory sent home prices soaring, with many millennials being left out of the market or outbid by wealthier buyers.”
High interest rates are one of several obstacles millennials face in owning a home, according to the survey of 1,000 millennial homebuyers.
Relevant data from the survey:
· 92% of millennials say the current level of inflation has affected their home buying plans.
· 3 in 4 millennials (76%) think market conditions will worsen before buying a home.
· Nearly half of millennials (47%) say high interest rates are a major barrier to homeownership.
· Buyer competition is no longer considered a barrier to home ownership, signaling a changing market. Just 28% of millennials say it’s an obstacle, up from 59% in 2022.
· 82% of millennials who own a home regret their purchase.
· The most common regret among millennial homeowners is that their interest rate is too high (22%).
· Nearly two-thirds of millennials (62%) plan to put down less than 20% down on a home. Just 34% did the same in 2022, when it faced stiff competition from other buyers.
· More than half of millennials (54%) have less than $10,000 in savings, a percentage that has tripled since 2022, when only 18% of millennials had that amount.
· Approximately 1 in 5 millennials (20%) have $0 in savings.
· The percentage of millennials who would buy a house on sight dropped slightly from 90% in 2022 to 86% in 2023.
Some 65% of millennials would buy a fixer-upper house, a sharp decline from 82% who said the same in 2022.
· Approximately 1 in 6 millennial homeowners (16%) who bought a home to fix regret it.
· Nearly 1 in 4 millennials (23%) plan to buy a home that costs more than the national median of $455,000, but to afford homes this expensive, 1 in 3 (38%) anticipate having to max out their budget.
· For their dream home, 1 in 7 millennials (14%) would offer $100,000 or more above the asking price, a slight decrease from the 1 in 6 respondents (17%) who said the same in 2022.
· Debt remains a looming barrier to homeownership among millennials, with nearly half (46%) owing $10,000 or more.
For more details about the study, click here.
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