Homeownership might not be an immediate option for many millennials, but according to a study by Clever Real Estate, it remains a core component of the American Dream for 84 percent of potential homeowners of this generation. And, this generation is here to stay not only as homebuyers but also as investors in real estate, the study revealed.
For the study, Clever Real Estate conducted a survey of 1,000 homebuyers who were planning to purchase a new home within the next year. Fifty-one percent of these respondents were aged between 18 to 34 years (the age-group classified as millennials).
The study revealed that millennials were 52 percent more likely than Baby Boomers or Gen-X to invest in property with 9 percent of those surveyed saying that they were interested in renting out new properties for passive income.
Looking at why millennials were buying homes, the study found that the need for more space was the number one reason that was driving more millennials towards homeownership. Fifty-four percent millennials cited it as a reason. This was closely followed by the belief that real estate was a sound investment (43 percent), it's more affordable than renting (43 percent), and the need for more privacy (38 percent).
Millennials weren't afraid of buying fixer-uppers either with around 68 percent of those surveyed noting that they were willing to purchase a home that required repairs. However, the study pointed out that millennials failed to realize that a home needing major repairs was more likely to hurt them than save money.
Citing a report by Home Advisor, the study said that the average cost to remodel a bathroom in 2018 was $9,742, whereas a kitchen was $22,145.7 and that debt-ridden millennials or those struggling to save enough for a down payment "should think twice before investing in a home in need of immediate, structural repairs."
With down payment one of the biggest obstacles cited by millennials to homeownership (37 percent), the study indicated that 31 percent millennials were looking to purchase more affordable homes in the $100,000 to $199,999 price range.
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