Survey: Millennials less likely to rely on supplemental sources for home purchase

Fewer millennials were planning to use assistance from family members, roommates, or other supplemental income options to purchase their first home, according to a recent survey by the real estate brokerage Redfin.

In March, the company polled 2,000 Americans who said they were planning to purchase a primary residence in the next 12 months, including 1,000 born between 1981 and 1996. Just under half the respondents in this age group—49 percent—said they expected they would be able to afford the mortgage on their new home without taking any extra steps to bolster their finances. This share was up from 40 percent in a similar survey issued by Redfin in July 2018.

One in 10 millennial respondents said they believe their parents or other family members will help with their mortgage payments. This was down from 17 percent in the July 2018 survey.

Just 7 percent said they planned to co-own a residence with someone who wasn't their spouse or partner, half the share in the survey from the previous year. The share indicating that they would find a roommate fell from 14 percent to 11 percent, while the share saying they would offer their home for temporary rentals fell from 12 percent to 10 percent.

"Over the last couple of years, millennial household incomes have been rising, and America's youngest professionals now earn more than previous generations did at this age. As a result, they're needing less and less help from family members to buy a home," said Daryl Fairweather, chief economist at Redfin. "A lot of that increase in millennial household earnings has been driven by millennial women, who are working more and earning more than women of previous generations. Millennials may have postponed getting married, having children, and buying a home while they got their careers on track, but now that they are more established in their careers and earning more, I expect to see more millennials buying homes and checking off those major life milestones."

The survey also found that millennials were slightly more willing to work a second job in order to afford their mortgage. Thirty-one percent said they planned to do so, up from 29 percent in the July 2018 survey.

Other research has suggested that millennials are more likely to rely on gifts or assistance from their family in order to be able to afford a mortgage. For example, a generational study by the National Association of Realtors found that 28 percent of younger millennials and 21 percent of older millennials said they had received such help in making their down payment. A survey by the rental resource ApartmentList in the spring of 2018 found that 17.1 percent of millennials believed their parents would give them money to go toward a down payment if they decided to buy a home.

Redfin previously found that 18 percent of millennials planning to buy a home in the near future said they would be receiving a cash gift from their parents, down from 24 percent in the previous year. That study also determined that millennials were more likely to be regularly building up savings from their paychecks for a down payment and less likely to be working second jobs for this purpose.

READER COMMENTS

Loading comments...
Hide Comments