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Shedding Light On Why Millennials Are Postponing Home Purchases

October 18, 2013  |  by Ellen

MillennialsWe have reported before on the noticeable decrease of first-time homebuyers in the current market and many leaders in the industry have attributed this to the lack of affordable inventory for this younger demographic.

While that certainly explains part of the problem, a new analysis by the Consumer Finance Protection Bureau offers a fuller explanation of the obstacles standing between a twenty-something and their first home. Student loans are a larger culprit than previously realized, with three-fourths of the decrease in household formation being directly attributable to student loan debt. A further sobering statistic is that 7 million borrowers are in default, which is directly impacting their ability to qualify for financing. Click over to read the full summary of the comments by Rohit Chopra, student loan ombudsman for CFPB.

Have you worked with millennials struggling to pay for their first home? What advice have you given them to help them through the process?

Posted in Blog, Featured, Industry News

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2 responses to “Shedding Light On Why Millennials Are Postponing Home Purchases”

  1. Lack of affordable inventory is certainly a problem, but this problem is not limited to millennials. What further impacts millennials, in my experience, is their priority on items that other generations might have considered postponing or eliminating altogether like annual vacations to other countries or pricy resorts, dining out and other expensive forms of recreation. I find a much greater emphasis on this with millennials and when all of this is factored into the budget there isn’t much left over for buying the house and maintaining it as well. Interestingly, some seem much happier sharing a luxury apartment with a roommate or other friend than owning a less luxurious starter home. Every generation has it’s priorities and this one is different than earlier ones so it is not surprising that this includes a lack of serious interest in owning a home if it otherwise affects their recreation and leisure priorities.

  2. Sheila says:

    One has to consider that almost no one alive ever thought they would see the value of their home/investment end up taking the kind of hit it did when the Real Estate Market crashed. So many homeowners now have homes worth less than they paid and worse less then they owe. We are a debt ridden era. Entertainment is the main industry in the USA, it seems, and the millennials are all caught up in that.
    There are, however, many young people with "old fashioned traditional values". I find that the age for this buyer is early 30's, Educated and employed.

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