Millennials’ perceived value in buying a home dropped below 50 percent, down significantly from post-Brexit high, according to the latest ValueInsured quarterly Modern Homebuyer Survey:
In addition to reporting a steady slide in their conviction for home buying, more millennials now associate owning with sacrifices:
“Conventional wisdom assumed millennials were buying homes later because they chose to get married and have children later,” says Joe Melendez, CEO and founder of ValueInsured. “New research now suggests homeownership may be the cause, not the effect, of delayed family formation. It is an alarming trend, and we see more acute evidence in expensive housing regions.”
Overextended, anxious buyers
Among millennials who are still interested and motived to become homeowners “in the near future,” their anticipation is often filled with anxiety. Among motivated first-time buyers, 49 percent are concerned rising mortgage rates could make homes currently within their budget become unaffordable later; 67 percent are concerned they will not save enough for a home they would actually like to live in; and 52 percent believe a home they buy now will likely drop in value within one year. Sixty-eight percent are concerned about another housing crisis; and 64 percent admit they will likely experience buyer’s remorse after reaching their homeownership goal.
Their trepidation could be explained by the high stakes these millennials plan to undertake. Eighty-five percent in the survey expect their home down payment to represent over half of their total personal assets.
“Most homebuyers experience a healthy amount of jitters before such a milestone purchase – that’s normal,” Melendez said. “But the new normal is highly anxious, inexperienced buyers bungee jumping in without knowing if their safety harnesses will work. That is an unhealthy, bordering on dysfunctional, trend that our industry needs to mitigate to ensure we do not lose an entire generation of future homeowners.”
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