Contrary to popular belief, millennials still highly value homeownership, and a majority expect to buy a home in the next five years, according to a CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) survey of young adults age 18-34.
More than half (54 percent) gave homeownership an importance rating of “8” or higher on a scale of 1-10, with 1 being “not at all important” and 10 being “extremely important.” The biggest advantages they see in homeownership are the freedom to do what they want with the property, privacy, and the satisfaction of ownership.
Moreover, millennials are optimistic about future home prices, with 59 percent saying they expect home prices will increase in a year, and 63 percent believing home prices will be higher in five years.
“Despite recent news reports of young adults moving back home to live with Mom and Dad, millennials haven’t completely written off homebuying and still aspire to owning a home,” says C.A.R. President Kevin Brown. “What’s encouraging is that while many saw their parents or friends struggle through the housing crisis, the majority haven’t changed their attitude toward homeownership. Young buyers may have to delay their home purchase, but they eventually hope to own their own home.”
Of those currently renting, more than one-third (36 percent) would be motivated by affordable home prices to buy now. Sixteen percent claimed they would be motivated by having the down payment required to purchase, and 15 percent by an improvement in their finances.
Additional findings from C.A.R.’s “2014 Millennial Survey” include:
- Of the millennial renters, the majority (67 percent) rent because they can’t afford to purchase a home.
- Like any other home buying segments, millennials are concerned about high home prices and affordability, with nearly half (45 percent) citing those as their biggest concern about homeownership.
- One in two millennial renters has student debt, but most don’t feel it is preventing them from qualifying for a mortgage. Additionally, more than four in 10 (43 percent) don’t have debt that would prevent them from buying a home.
- Even though many millennials saw their parents struggle through the recession, more than half (59 percent) says the housing crisis didn’t affect their attitude toward homeownership being a good investment.
- Despite the stereotypes that these young adults mostly seek urban living with a high walkability factor, millennials says they prefer single-family homes on large lots in the suburbs, with two out of three (67 percent) indicating they plan to purchase a single-family detached home, while only 12 percent says they plan to purchase a townhome or condominium.
- While they aspire toward homeownership, the majority was uncertain or doubtful they could obtain a mortgage now, with 45 percent saying they were not sure, and 33 percent saying they would not be able to obtain a mortgage now.
C.A.R.’s “2014 California Millennial Survey” was conducted in August 2014 in an effort to learn more about millennials’ attitudes toward homebuying and homeownership. The online survey polled 1,000 California residents age 18-34.
For complete survey results, visit www.car.org/marketdata.