Despite their reputation for preferring more transient and frivolous avocado-toast-loving lifestyles, surveys show that many millennials do want to buy houses — and they’re willing to make sacrifices in order to afford them.
Business Insider reported earlier this year that “the homeownership rate among households headed by someone under age 35 increased the most of any age group in the fourth quarter of 2017, jumping from 34.7 percent a year earlier to 36 percent.” Across the nation, homeownership among millennials is on the rise.
To help us understand the newest members of the real estate market, Redfin “commissioned a survey of 2,000 U.S. residents who planned to buy or sell a primary residence in the next 12 months.” They hoped to learn more about the “objectives, perspectives and concerns” of prospective homebuyers between the ages of 24 and 38.
As you’d expect, the survey reports that half the respondents claimed “having enough money for a down payment” was their top concern, and similarly 45 percent were concerned about affording a home in their preferred location. Forty-one percent were concerned about rising home prices.
The survey also looked at the many ways in which millinnials save for their down payments. The majority — 69 percent — saved directly from their paychecks, but others had to get a little more creative.
Thirty-six percent got a second job in order to save for a down payment. Thirteen percent pulled money out of retirement funds, and 10 percent sold cryptocurrency. Twenty-four percent reported that they received a cash gift from their family, and twelve percent used money from their inheritance.
Redfin didn’t stop there. They broke the survey respondents down by household income levels and found some surprising results. For example, they discovered that the millennials in households earning more than $100,000 per year were less likely to have saved directly from paychecks. Only 60 percent of the high-earners saved for their down payment directly from their paychecks, compared with 75 percent of those who earn less than $100,000.
That’s probably because the high-earners were more likely to have cashed in on other investments, the survey found. Millennials earning more than $100,000 were more than three times more likely to have sold cryptocurrency investments, and they were twice as likely to have sold stock investments. They were also more likely to have received an inheritance or cash gift from family or to have pulled money from their retirement savings.
In order to afford their mortgage, the millennials who earn less than $100,000 per year said they planned to pursue additional employment to cover their mortgage, the survey states. Those with higher incomes were more than three times as likely to get a roommate, split ownership or drive for a ride-sharing service.