Mortgage rates are rising—and millennials are noticing.
Ninety-two percent of home-buying millennials in a realtor.com® survey believe higher interest rates will have an impact on their purchase, including a change in desired location, price range and/or square footage.
Other generations are not feeling the impact as significantly. Why? Millennials carry debt and have down payments that are on the small side, according to realtor.com. The most common debt is on credit cards (had by 78 percent of millennials), followed by a car loan (68 percent), a personal loan (62 percent), a mortgage (62 percent), a student loan (61 percent), and a home equity loan (57 percent). When comparing debt by generation, just 49 percent of Gen Xers and 9 percent of baby boomers have college debt—a burden thought by many to be closing millennials off from purchasing.
Additionally, when it comes to a down payment, millennials have less than others. The majority (37 percent) have less than 10 percent saved, versus 34 percent of Gen Xers and 20 percent of baby boomers.
“Existing debt and lower down payments leave younger shoppers more exposed than others to the impact of rising mortgage rates and record-high home prices,” says Danielle Hale, chief economist for realtor.com. “These obstacles won’t prevent millennials from finding and buying homes, but most will have to adapt to these challenging market conditions by adjusting their home search.”
Of all buyers—including millennials—just 17 percent believe they will be unaffected by higher interest rates, and only 21 percent believe they will be unhindered by prices.
For more information, please visit www.realtor.com.