Homeownership ranks high
Millennials are serious about homeownership. In fact, according to a new report, the Millennial cohort values owning a home over nearly every other milestone — including getting married, having children and traveling.
A top priority
According to the latest Bank of America Homebuyer Insights Report, homeownership is one of the most important life goals for Millennials, with 72 percent saying it’s a top priority.
Homeownership ranked higher than getting married (which only 50 percent of Millennials said was a life goal), having children (44 percent) and traveling the world (61 percent). It was second only to retirement — which 80 percent said was a priority.
As D. Steve Boland, head of consumer lending at Bank of America explained, “Millennials are redefining life’s priorities by placing homeownership above nearly all other key milestones, including marriage. Millennials equate homeownership with personal and financial success, and it’s encouraging to see this generation aspire to homeownership.”
When Millennials become homeowners
Nearly 40 percent said they plan to buy a home within two years, while another 36 percent said it’d be three to five years until they buy.
What’s causing the hold-up for these longer-term buyers? It’s likely the down payment — or at least the down payment they think they need.
According to the report, 49 percent of Millennials believe they need a 20 percent down payment to buy a home. Another 43 percent think they’ll pay private mortgage insurance if they don’t. Almost a quarter believe they need a perfect credit score to get a mortgage loan.
“It is clear there are inconsistencies and a knowledge gap in the ‘own vs. rent’ debate,” Boland said. “While contradictory, many think renting will be just as or less expensive than owning in the long-term, but they fully acknowledge their rental costs will continue to go up over time. This group is further held back by persistent homebuying myths surrounding down payments, private mortgage insurance and ‘perfect’ credit scores.”
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