Millennials Face Homebuying Challenges | Top Factors Explained
According to Trulia’s recent Consumer Home Buying Survey, young adults ages 20 to 36 are most eager to purchase a home, but also endure the most challenges. Although this generation is most active in the market, a variety of factors are forcing them to make difficult decisions when it comes to buying a home or choosing a neighborhood to live in.
Many of the obstacles millennials face today revolve around financial concerns including rising home prices and mortgage rates, saving for a down payment, poor credit history, student debt and an unstable job outlook. However, other factors hindering homebuying range from getting outbid on a listing to not being able to find a home they like.
Alexandra Lee, a Trulia Housing Data Analyst, explained, “Entry-level homes are becoming scarcer and pricier, but also smaller, older, and of worse quality. In a market that’s tough for everyone, millennials—the youngest and largest homebuying generation—also face the most obstacles, and most often have to put their homebuying plans on hold.”
For individuals in this generation who do not want to set aside their dream of owning their own home, compromises must be made. The same Trulia report detailed 84% of millennials are willing to give up a home feature to live in their ideal neighborhood, while 89% would give up a neighborhood feature to buy their ‘perfect home’.
“With tight budgets and fewer choices on the market, most millennials are forced to make trade-offs and are more willing than other generations to give up home and neighborhood features in order to find their ideal home,” said Trulia Senior Economist Cheryl Young.
The top home features to go first including a garage, recently updated kitchen, square footage and storage space. When it comes to neighborhood features, millennials are willing to forego neighborhood activities, access to parks and good nearby schools.
“In markets where the economy and job growth are thriving, we may see some of these financial challenges start to dissipate as millennials mature into their careers,” explained Young. “If anything, millennials can hold out hope that the encouraging housing starts we saw in 2017 can lead to some relief in the starter home segment.”