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Millennials’ Debt Continues to Impact Their Homebuying Dreams

by Leighton, Kelly on

Millennials’ debt is continuing to prevent many of them from becoming homeowners.

As the generation ages, their trouble with debt continues. According to a recent report from Clever Real Estate, 72% of millennials have some form of debt (non-mortgage), owing on average, $117,000. While 71% are confident that they can pay it off in five years or less, 9% said it will take more than a decade and 6% reported they will never be able to pay it off. Not surprisingly, 41% of millennials said they feel pessimistic about their finances.

As for regrets, millennials said they have a few. More than one-third said they regret not saving enough, 32% regret going into debt and 32% regret not investing sooner. Nearly a quarter said they wished they choose a higher-paying career and 22% regret their student loans. Nearly half  (48%) of millennials have student loans, owing $126,993 on average. Credit card debt is another issue for many millennials, 67% report they have it. Twenty-nine percent said they do not pay their credit card off every month. The average amount millennials with credit card debt owe is $5,349.

The cost of housing is another deterrent to millennials. As both home prices and rent prices continue to grow, the average millennial is spending 47% of their monthly income on housing. While 53% of millennials are homeowners already, 40% of those homeowners do not think they could afford a home in today’s market. About 30% of millennials who are not homeowners do not think they will ever be able to afford to buy a home.

However, there are millennials who are debt-free, about 28% of them. More than one-third (34%) said they have never had debt, while 40% have paid everything off in the last two years or less. Of those who have paid off their debt, 83% said they think they can stay out of debt.


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