A big conversation amongst the real estate struggles of recent years has been the barrier of millennials to break into the housing market and become first-time homebuyers. Despite 48% of millennials feeling homeownership isn’t affordable with current market issues, 78% still feel purchasing a home is part of the American dream, according to a new report from Clever.
Clever’s new report surveyed 1,000 Americans who are planning to purchase a home by the end of 2024 about their plans, anxieties and compromises they’re willing to make.
The report found that overall, 96% of millennials are concerned about purchasing a home. In addition, 93% of millennials say the market has impacted their home-buying plans, and 76% are concerned it will get worse before they buy a home.
Key highlights:
- Half of millennials (50%) say high interest rates are a barrier to homeownership, and 67% regret not purchasing a home when rates were lower.
- More than 3 in 4 millennial home buyers (78%) would consider accepting an interest rate that’s higher than the national rate of about 7%.
- 65% would accept an interest rate of 10% or more, while 23% would accept a rate of 15% or more.
- 96% of millennials say high interest rates have affected their home-buying plans, and 70% say inflation has affected their plans.
- Nearly half of millennials (47%) plan to put down less than 20% on a home.
- About 1 in 4 millennials (25%) have less than $10,000 in savings, and 1 in 8 (12%) have less than $1,000 in savings—including 5% who have nothing saved.
- The percentage of millennials who have $10,000 in debt (57%) is more than double the percentage who have $10,000 in savings (25%).
- The median U.S. home costs $431,000, but 57% of millennials plan to purchase a home that costs less than $400,000.
- For their dream home, 79% of millennials would pay above asking price to beat the competition—down from 85% who said the same in 2023.
- 1 in 9 millennials (11%) would still offer $100,000 or more over asking price for their dream home. That’s a significant drop from 1 in 6 millennials (17%) who said the same during the home-buying frenzy in 2022.
- 85% of millennials would buy a home sight unseen, but 1 in 8 millennial homeowners (13%) regret purchasing a home without seeing it first.
- Although 35% of millennials fear making major repairs, 67% would be willing to purchase a fixer-upper. But nearly 1 in 5 millennial homeowners (18%) regret buying a fixer-upper.
- Millennials are so desperate to own homes that 67% would buy a home with asbestos, 62% would buy a home with mold, and 58% would buy a home with foundation issues.
- Overall, 90% of millennials have regrets about their first home purchase—up from 82% in 2023.
- The most common regret is a bad location (27%), followed by bad neighbors (26%) and an interest rate that’s too high (25%).
For the full report, click here.
