It’s not just student loans anymore. Millennials are reporting their biggest hurdle to homeownership is higher interest rates.
According to a recent survey from Clever Real Estate, 47% of millennials said that high interest rates are a huge obstacle to homeownership. Additionally, 92% of millennials said recent inflation has impacted their homebuying plans and 28% are holding up their home search. More than 70% of millennials said homebuying is stressful, with 51% reporting crying during the process and 44% acknowledging it had a negative impact on their personal relationships.
In 2022, buyer competition was a concern for 59% of millennials, in 2023, just 29% predict it will be an additional barrier. However, 76% of millennials said they believe homebuying conditions will worsen before they are able to buy. And 62% said they plan to put down less than 20% on a home, compared to 34% in 2022. Fifty-four percent of millennials said they have less than $10,000 in savings and 20% have nothing in savings. In 2022, only 18% of millennials reported having $10,000 or less in savings. Around half of millennials (46%) reported that they have debt of $10,000 or more.
Other concerns millennials reported having about buying a home include making major repairs (43%), hidden costs of homeownership (41%) and not finding affordable homes (39%). Additionally, 81% of homebuyers regret not buying a home when interest rates were at record lows.
More than 80% of millennial homeowners said they have at least one regret about their property, with 22% regretting the high interest rate they committed to, 21% said they felt uneducated about the homebuying process and another 21% said their neighborhood has changed too much.
However, millennials are willing to make compromises to become homeowners. About two-thirds of millennials said they would buy a fixer-upper and 86% said they would buy a house unseen. Around 60% said they are saving more for a home, 36% are planning to spend more on a home, 28% are delaying plans and 26% are buying a fixer-upper.