Some millennials are feeling trapped in renting because they’re unable to save enough to make the leap into homeownership, according to Apartment List’s “2019 Millennials & Homeownership Report.” The report analyzes the attitudes, expectations, and actions of more than 10,000 millennial renters nationwide.
The vast majority of millennials say they want to own a home and view it as a financially superior choice over renting, but nearly half of the millennial renters surveyed say they have no down payment savings. Some say they are expecting financial support from their families, but that level of support has been declining over the past year, the survey shows.
Student loan debt is a major barrier to their savings plan. Debt-free millennials are saving about $100 more each month compared to those who are still paying student loans.
Overall, at the current savings rate, only 25% of millennial renters will be able to afford a 10% down payment on a median-priced home in the next five years, the study finds. “If student loan obligations were dismissed, this would improve to 38 percent nationally, and more than 50 percent in some metropolitan areas like Minneapolis and Houston,” the study notes.
Further, only about 13% of millennial renters say they’ll be able to afford a 20% down payment within the next five years. That jumps to 25% if they cut the down payment by half, or to 39% if they put 5% down, the study shows. The following chart shows how many millennials are on track to buy their first home across the country.
Source: “2019 Millennial Homeownership Report: More Millennials Are Preparing for a Life of Renting,” Apartment List (Nov. 19, 2019)
