According to a 2017 online survey from Michigan State University and
United Wholesale Mortgage (UWM), Millennials are eager to put down roots and enjoy the “freedom” that comes from
homeownership—with 95 percent of those surveyed saying they are actively saving for a purchase, and 90 percent planning to buy within two years.
The survey—which included 412 people nationwide (210 homeowners and 202 potential homeowners) ages 25 to 34—found that a vast majority of would-be buyers are dissuaded from purchasing because they think they don’t have enough for a downpayment. Of those who took the survey, 70 percent said that saving for a downpayment is the biggest obstacle to achieving their goal of homeownership; and 67 percent believed they needed to save up the full 20-percent down.
According to the survey, 25 percent of homeowners have average household income under $50,000 per year, and 40 percent of homeowners had student debt when they closed on their home.
When it comes to saving for a downpayment, even small changes in spending habits—brown bagging lunch instead of buying out, or skipping Starbucks for a year—can bring would-be buyers over the finish line. What’s more, the ability to close on a home for less cash upfront can help borrowers pay for critical expenses associated with homeownership such as remodeling and renovations.
As one of the primary hallmarks of “adulthood,” homeowners are more likely than their counterparts to have completed major rites of passage, including obtaining credit cards, taking out an auto loan, having a 401(k) and purchasing a new car.
Other notable findings of the survey are:
► Ninety-one percent of respondents view homeownership as a financial investment, but not an easy one to make
► Sixty-seven percent worry about being approved for a mortgage
► Fifty-three percent are afraid they won’t be able to make payments on a mortgage
► Thirty-six percent of homeowners were not married when they bought their first home
► Forty-two percent of homeowners used gifted money towards a downpayment
