After coping with such issues as sheltering in place and facing a new age of remote work, millennials are now more inclined to buy homes.
Almost 30% of them report the COVID-19 pandemic drove them to begin house hunting earlier than they initially planned, a new survey by Clever shows. Their readiness comes almost a year after the crisis produced travel restrictions, social distancing, lockdowns, and other big adjustments.
And with the coronavirus ongoing, this generation knows the housing they want. Millennials yearn to buy homes that are affordable, spacious, and comfortable. And they crave those amenities even if means purchasing a fixer-upper (71%) and buying a house without seeing it (about 80%). Of course, buying a home sight unseen could be risky for several reasons including the chance of picking up large repair costs.
For its 2021 Millennial Home Buyer Report, Clever questioned 1,000 people in January 2021 planning to buy a home in the next year on their hopes and anxieties in doing so. Respondents also were asked what concessions they are ready to make to become homeowners. Clever is a real estate education platform for home buyers, sellers, and investors.
So, what challenges could millennials run into as they pursue homeownership?
One could be housing appreciation. Clever reported home prices rose 8.4% in the past year, and they are expected to climb an additional 10.5% this year. Plus, the surges come as millennials are facing growing demand and fading inventory for housing in a competitive market.
Another hurdle may be finances. Clever declares 57% of millennials have more than $10,000 in savings, up 36% from last year. Yet two-thirds are planning to put less than 20% down on their homes.
Top actions respondents are taking to help cover down payment include tapping into personal savings (67%), investment accounts like retirement or stocks (24%), and emergency funds (17%).
Still, historically low interest rates are a compelling factor why millennials are house hunting. Some 40% are intending to make such a move, about four times higher than last year. And they want larger homes, around 2,400 square feet—a 41% rise from last year.
Simultaneously, student loan debt could hinder homeownership for millennials. Some 77% are now paying off student loans, and 31% are concerned that debt could block their home-buying ability.
Yet, those millennials might get some help from President Joe Biden. He has instructed the Education Department to suspend federal student loan payments through September 30, Clever reported. The loan forbearance period has been in place since March 2020, allowing many millennials to stash money away for a home instead of paying on their loans.
Black Enterprise reported Rep. Alexandria Ocasio-Cortez continues her drive to prompt Biden to cancel up to $50,000 in student loan debt. Other progressive Democrats have taken a similar stance on the issue.