In light of higher inflation than the 2% target rate the Federal Reserve desires, the highest mortgage rates in 20 years, heightened economic insecurity, high levels of secured and unsecured debt, and growing concerns about climate change, you might expect that achieving the American Dream of owning a home may be souring, but that is not the case.
According to a new survey from Falls & Co., a Cleveland-based real estate marketing and research firm, has found that 89.5% of millennials in their prime homebuying age (25-44) believe they can archive the American Dream of owning a home—while less than one percent said that owning a home was not important to them or financially possible.
While answers to the survey varied across the board, the number one reason to own a home was emotional rather than rational. Sixty-three percent said they want to own a home just because they like the idea of owning a home. A further 44% want to own a home as an investment to build wealth over time.
Big life events were also a key indicator of wanting to own a home; while numbers were not extravagant, 23% said getting married would be a reason to buy a home, and 20% said the birth of a child necessitated buying a home.
So, what are millennials searching for? Primarily, 76% of millennials are searching for a detached single-family home, while 3.6% desired a condominium, 8.6% preferred an apartment, and only 3.7% desired (or could afford) to move into a mansion.
What else were millennials looking for? They want their commute to be reasonable, which typically means living closer to city centers. This desire was followed by the number of bedrooms the home has, then the square footage of not just the home, but the property it is built on.
The least thing millennials agreed on that they looked for in a house was curb appeal. Energy efficiency—and to an extent, smart home devices—also placed surprisingly low among the list of wants, due to the fact that millennials have grown up with technology against a backdrop of energy related issues.
The survey also revealed that millennials also do not want to put much “sweat equity” into their homes meaning they are not considering “fixer-uppers” as viable alternatives. Just 16% are interested in a fixer-upper. Thirty-two percent want a move-in ready home. Twenty-four percent want a home that needs only minor cosmetic repairs. And 13% prefer to buy new.
Also, just 23% said they would want their home to be in a rural area, compared to 40% who prefer the suburbs and 31% who want to live in or close to a city. Those ages 35-39 were the most likely to want a home in or close to a city (41.2 %).
A few other interesting differences among ages, gender and geography:
- People in the West, where home prices are generally higher, believe it's more important to own a home than people in all other regions (64%). People in the Midwest, where homes are generally less expensive, place the least emphasis on owning a home (57.2%).
- Overall, 88 % say home ownership is very attainable, but men are more likely than women to feel this way (43.8 percent of men compared to 34.4% of women).
- Of those who say they envision themselves owning a home one day, younger people are more confident about this. A little over half of those between 25-29 say they'll own a home one day compared to 39.9 % of those aged 30-34, and 28 % of those between 35-39.
Click here to see the report in its entirety, including more features desired by millennials that were found by this survey.