Millennials typically choose to rent longer, delay buying a house, and get married later in life. We surveyed 600 millennials to find out why.
Millennials are lazy, entitled, and killing every industry from department stores to canned tuna. At least that’s what we’ve been told, data be damned. Still, it’s certainly true that the way Millennials live is shaking things up on a large scale, and it’s fascinating to look at how.
One industry impacting Millennials in a huge way (and vice versa) is the real estate market. Millennials, often racked with student loan debt and collectively constituting a historically small fraction of the nation’s total wealth, are typically choosing to rent longer and delay buying a house. For some of the same reasons, many Millennials are getting married later in life.
We wanted to know more about what homeownership really looks like for Millennials, so we decided to survey 600 people under 40 years old on their experiences and opinions about buying, renting, and how marriage plays into the mix. Read on to discover our findings.
Table of Contents
i. How Does Marriage Affect Millennial Homeownership?
ii. How Do Finances Affect Millennial Homeownership?
iii. How Do Millennials Purchase Homes?
iv. How Does Culture Affect Millennial Homebuyers?
How Does Marriage Affect Millennial Homeownership?
According to our survey results, 57% of people purchase their first home after getting engaged. In fact, 51.8% of couples don’t own a home when they get married. And some simply never do.
The typical modern relationship (generally) goes like this: from dating, to living together while renting, to getting married, to purchasing a home. Our results actually confirmed that millennial couples rent for an average of 15 months after getting married, presumably while shopping for their first home together. We also found that the average person under 40 rents for around 23 months before purchasing their first home.
And where are Millennials buying these homes? It turns out that 64% of couples purchase a home within 100 miles of where they got married. However, Millennials are more likely to live further away from where they got married than members of Generation X.
How Do Finances Affect Millennial Homeownership?
As we mentioned earlier, Millennials are up against a historically challenging financial situation relative to other generations. In fact, they’re often called the “brokest” generation, particularly due to mounting student loan debt. Not surprisingly, this is reflected in our survey results. 64.3% of our respondents cited debt as a reason they would delay purchasing a home.
Job security is also a significant concern for this generation, as 20.3% of our respondents reported it as a major financial worry. Millennials are also concerned about getting approved for a mortgage and having bad credit (19.5%). It’s clear to us that the reasons for delaying a home purchase are not solely related to relationships or marriage.
How Do Millennials Purchase Homes?
So, let’s say you are one of the lucky Millennials who overcome the above financial concerns and purchase their first home. According to our research, 57% of Millennials are purchasing homes in the “starter home” range of $100,000 – $300,000. How are you financing your purchase?
40% of Millennials finance their down payment with personal savings, compared to 30.1% of Gen Xers. Additionally, down payment assistance program’s are more popular with the Millennial generation than with Gen X. Far from lazy or entitled, it seems Millennials are doing the best they can to work with what they’ve got financially in the real estate market.
How Does Culture Affect Millennial Homebuyers?
There is a certain cultural influence around buying a house that we wanted to explore as well. For example, what are some of the non-financial, non-marriage-related reasons Millennials are buying homes later in life?
According to 55.6% of our respondents, committing to one place is a major reason. Perhaps Millennials like to move around and explore new cities, which is difficult to do as a homeowner. These concerns could also be correlated with previously noted job security concerns where they currently live.
Even more of a deterrent was the stress of homeownership (58.1%). Clever Millennials—they appear to understand that one major benefit of renting is that they can largely avoid the mental and financial burden of repairs and upkeep.
Clearly, there are significant trends in Millennial homeownership that we should be paying attention to. We learned that most Millennials do not own a home before they get engaged or married. We learned that millennials are renting longer than previous generations due to concerns like job security and committing to one place.
The stress of homeownership has been an increasing concern for each generation, and it’s safe to infer that renting is just easier for time-crunched Millennials on a budget. On average, newlywed couples are renting for longer after their wedding than previous generations. (Related: renting an Italian-crafted merino wool suit for said wedding is arguably a wise alternative to a polyester purchase.)
We surveyed 600 U.S. citizens aged 40 years old and younger on their experiences and opinions about buying, renting, and marriage, from October 24-25, 2019.