Realtors Study: Millennials Say Homeownership Still Out of Reach
New research from the National Association of Realtors has found that 94 percent of young renters eventually want to buy their own home, but more than half say they can't afford to.
The struggle is real for millennials looking to buy a home.
Ninety-four percent of young Americans surveyed by the National Association of Realtors from March to December say they want to purchase a home eventually. But more than half say they’re stuck renting because they can’t afford to buy.
Even considering significant financial obstacles, the findings “debunk the notion that that young adults aren’t interested in buying a home,” NAR said in a statement.
“Despite entering the workforce during or immediately after the worst of the financial and housing crisis, the desire to become a homeowner appears to be a personal goal for a convincing majority of young renters,” NAR Chief Economist Lawrence Yun said in the statement.
The Housing Opportunities and Market Experience survey, which compiled responses from more than 9,000 households, is a first for NAR, which plans to release HOME reports quarterly. The next one slated for March 2016.
The study found that 83 percent of all current renters want to become homeowners someday; that number rose to 94 percent among people under the age of 34.
Most renters surveyed—roughly 77 percent of respondents—believe that owning a home embodies the American Dream. The most popular reasons to own a home included raising a family (36 percent), having a place of their own (26 percent), and building a nest egg for retirement (14 percent).
But about two-thirds of respondents believe it would be tough for them to get a mortgage today; 5 percent of respondents have already tried and failed to finance a house.
First-time purchases lagging
The survey comes amid a three-year decline in first-time home purchases, according to the Wall Street Journal. Only 32 percent of home buyers in 2015 were first-time buyers, the lowest percentage since 1987, frustrating many in a strong housing market.
“The short answer is they can’t afford it,” Nela Richardson, chief economist at real estate brokerage firm Redfin, told WSJ.
The HOME survey revealed a split in how respondents perceive the health of the economy. Half of all participants say the economy is getting better; 44 percent believe the economy is in a recession.
“I thought we would see some pickup in the first-time buyers given that the economy has been expanding for years,” Yun told WSJ, noting that young people and the real estate industry have “some hurdles to overcome.”