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    Real Estate
    Saturday, May 11, 2024

    Survey: Majority of Millennials intend to enter the housing market in 2018

    Another survey of young adults has concluded that this generation is interested in purchasing a home, but does not plan to do so for another couple of years.

    Apartment List, a site specializing in matching tenants with available apartments, commissioned the survey to determine the attitudes of Millennials—those between the ages of 18 and 34—toward buying a home. Andrew Woo, data scientist at the company, says information from the United States Census Bureau indicates that only 34.6 percent of Americans in this age group are homeowners. This is the lowest homeownership rate for Americans under the age of 35 since the Census began recording this data in 1984.

    Woo says the lower rate of homeownership is more a lingering effect of the Great Recession than it is a preference for renting. The Apartment List Renter Confidence Survey questioned respondents on a number of issues, including satisfaction with their city, confidence in the local economy, quality of schools, and plans for homeownership. Satisfaction varied among different regions, and only 9 percent of Millennials respondents said they plan to always rent their home.

    Seventy-four percent of Millennials in the survey said they plan to purchase a home at some point in the future. Seventeen percent said they were not sure whether they will purchase a home or not.

    Despite this aspiration for homeownership, most Millennial respondents said they will wait until at least 2018 to try to find a home to buy. Only 6 percent said they intend to buy a home within a year, while 19 percent would like to do so in one or two years. Twenty-two percent plan to buy in two to three years, 30 percent in three to five years, and 23 percent in five years or more.

    Older respondents in the survey were ready to make a faster move into homeownership. Thirty-five percent of those ages 35 and older said they plan to buy a home in one to two years; 15 percent intend to make a purchase within a year. Twenty-three percent expect to buy a home in two to three years, 18 percent in three to five years, and 9 percent in five or more years.

    Among respondents between the ages of 18 to 24, 31 percent plan to buy a home three to five years from now, 26 percent in five years or more, 22 percent in two to three years, 16 percent in one or two years, and 5 percent within a year. Twenty-eight percent of respondents between the ages of 25 and 34 plan to buy a home in three to five years, 26 percent in one to two years, 26 percent in two to three years, 15 percent in five years or more, and 7 percent within a year.

    Marriage was also a significant factor influencing when a Millennial respondent said they planned to buy a home. Woo said that since Millennials are getting married at an older age on average, this trend may also increase the average age of those who are buying a home.

    Thirty-two percent of unmarried Millennials expect to buy a home in three to five years, while 27 percent don't expect to do so for five years or more. Twenty percent plan to buy a home in two to three years, 16 percent in one to two years, and 5 percent within a year.

    Twenty-nine percent of married Millennials said they will likely buy a home in three to five years, and 24 percent said they expect to do so in two to three years. Twenty-two percent intend to buy a home in one to two years, 20 percent in five years or more, and 6 percent in a year or less.

    Woo said older, married Millennials are the most likely to try to buy a home in a short period of time, with 58 percent of these respondents saying they intend to purchase a residence within the next three years. Only 30 percent of younger, unmarried Millennials had the same plans.

    Higher levels of income had a significant effect on whether a Millennial respondent aspired to own a home. Only 63 percent of those who had not completed high school said they plan to own a home, while 67 percent of those who had finished high school or earned a GED said they intend to buy a home.

    Millennials who graduated from technical school had the highest share of homeownership aspiration at 79 percent. Seventy-seven percent of respondents with a bachelor's or associate's degree, 76 percent of those who had completed some college, and 72 percent of those with a graduate degree said they plan to buy a home. Woo said higher levels of student debt for some of these degrees may have reduced the willingness to buy among some respondents.

    Income levels generally did not correspond with a Millennial respondent's willingness to buy a home, although it had a larger effect at a city level. When the responses from five large cities were averaged, Millennials making $30,000 to $60,000 were 15 percent more likely than those making $30,000 or less to be planning a home purchase. Those making $60,000 or more were 25 percent more likely to be planning a home purchase.

    There were some regional variations among Millennial plans to own a home. Cincinnati was the metro area where Millennials were most likely to want to purchase a home, with 85 percent of respondents from this area saying they intended to do so. Other metro areas with high levels of homeownership aspiration included Austin (82 percent), Denver (81 percent), Atlanta (81 percent), and Washington, D.C. (79 percent).

    San Jose had the lowest percentage of Millennial respondents expecting to buy a home, with only 53 percent saying they wish to do so. Miami, St. Louis, and Virginia were the next lowest ranked at 66 percent each.

    Millennials were less likely to plan a home purchase if they were living in expensive cities. Sixty-seven percent of respondents in Boston and San Francisco said they plan to buy a home, as did 68 percent of those in New York City.

    Among the 40 states included in the survey, Idaho had the highest rate of planned homeownership with 95 percent of Millennial respondents expecting to buy a home. Other high-ranking states included South Carolina (92 percent), Maine (90 percent), Alabama (85 percent), and Mississippi (85 percent). With the exception of South Carolina, where 4 percent had no interest in buying a home, no respondents in these states said they expect that they will always rent.

    Arkansas had the lowest rate of intended homeownership among Millennials, with 59 percent saying they expect to buy a home. Other low ranking states included Oklahoma (62 percent), Arizona (64 percent), Missouri (64 percent), and Rhode Island (67 percent).

    Connecticut ranked 26th, with 72 percent of Millennial respondents saying they expect to buy a home. Seventeen percent said they plan to always rent, the second highest rate behind the 19 percent recorded among Arkansas and Oklahoma respondents.

    The Hartford metro area was one of the higher ranked ones in the nation for Millennial homeownership aspiration, placing 18th. Seventy-five percent said they plan to buy a home, while 11 percent said they expect that they will always rent.

    The conclusions of the Apartment List survey were similar to another one conducted by the real estate site Trulia recently. In that survey, 89 percent of Millennial said they plan to buy a home but 69 percent said they will wait at least two years to do so. Respondents who were married or had children were more likely to try to buy a home earlier.

    The Apartment List Renter Confidence Survey polled 18,682 renters in the United States. Of this group, 5,844 identified themselves as being between the ages of 18 and 34.

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