A new study by Chase Home Lending found 52% of millennial first-time homebuyers feel financially ready to buy a home. And 70% said they are willing to cut back on extra-curricular activities, like shopping, movie-going and a spa visit, once a month to make it happen. The bank surveyed 1,000 first-time U.S. homebuyers, ages 22 to 38, in March.
Millennials currently make up the largest share of homebuyers, according to the National Association of Realtors. However, the generation’s homeownership rate is lower than that of their parents and grandparents at the same age, a report by the policy research group Urban Institute found.
To be sure, they are facing increasing hurdles in today’s real estate market. Prices are rising and the number of the homes on the market are shrinking. According to Zillow, starter home prices have increased by 57.3% over the last five years, while inventory has dropped by 23.3%.
They also have things like student loan debt and delayed marriage to thank for the late start. Additionally, older millennials graduated during the last recession and witnessed the housing crisis.
“They went through a process where renting seemed like a better idea and a safer outcome,” said Sean Grzebin, head of consumer originations at Chase Home Lending.
Then there is the desire they have for a more balanced life that includes spending money on traveling and going out to dinner, he added.
However, now “they are starting to realize the importance of homeownership and the necessity to have some balance in terms of sacrificing those things,” Grzebin said.
In fact, Suckno said she was among the last of her friends, fellow millennials, to buy a home.
But just because they are entering the housing market doesn’t mean millennials are free from buyer’s remorse.
A survey of 10,000 homeowners and renters from Zillow found that 81% of young homeowners between the age of 18 and 34 years old had at least one regret about their home, compared with 65% of those 55 years and older. Most of those younger buyers’ regrets had to do with their mortgage payments and type of mortgage they have.
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