51% of Millennials Are Currently Saving for a Home

Over half (51%) of millennials are actively saving for a home, according to a survey by Lombardo Homes. However, 77% said their rent is so high, it’s hard to save enough for a home.

For many ages 28-43, debt is placing a significant hindrance on the homebuying process. In fact, 74% of respondents said their debt is inhibiting their savings, with the most common forms being:

1. Credit card debt (54%)
2. Student loans (40%)
3. Auto loans (26%)
4. Medical debts (16%)

However, financial readiness only plays one role in the homebuying process. Fifty-eight percent of millennials reported that even if they had the money to buy a home, they didn’t currently feel prepared to do so.

The main reasons cited for not having bought a home yet were:

1. Can’t afford a down payment (75%)
2. Not ready for the commitment (54%)
3. Can’t afford something nice enough for me to want (48%)

Still, homeownership remains a goal for many millennials, as, if given the choice, 75% would rather buy than rent.

Millennial Homebuying Knowledge

But what do millennials know about homebuying? The survey found that many had misconceptions about the process and didn’t know what to expect financially.

• 2 in 5 overestimated their buying potential
• 1 in 10 underestimated interest owed by $200,000 or more
• 1 in 6 overestimated the increase in home value by $100,000 or more
• 47% didn’t know a good percentage needed for a down payment
• 46% didn’t have a sense of the average home price in their area
• 43% didn’t know what a good interest rate was
• 23% didn’t know if property taxes in their area were high, medium or low