What Do Millennials Want? The American Dream

While millennials are often stereotyped as having an aversion to commitment, new research shows they are actually very invested in putting down roots.

According to a recent realtor.com® and HarrisX survey, homeownership is very much a part of the American Dream for millennials, who are often characterized as more in favor of renting after witnessing the struggles of their parents during the 2007/2008 housing bust. However, the survey—which polled more than 800 prospective homebuyers who plan to purchase their first home in 2021—reveals that homeownership aspirations are indeed a driving force for this younger demographic group.

"Americans, even millennials who many thought would never buy, have a strong preference for homeownership for the same reasons many generations before them have—to invest in a place of their own and in their communities, and to build a solid financial foundation for themselves and their families," says realtor.com® Senior Economist George Ratiu. "However, today's first-time homebuyers face unprecedented challenges brought on by a lack of available homes for sale and double-digit price growth. They are resilient though, with many in the market searching for their home for more than a year."

The challenges of today’s millennial homebuyers are evident in the survey results, which show that 43% of those queried have been searching for their home for more than a year. One-third (33%) of the respondents have been in the market between six and 12 months, an indication that buying a home in today's market is not easy. Approximately one in seven—14%—have been searching for three to six months, and 10% just entered the market in the last three months.

Contrary to popular opinion, millennials consider becoming a homeowner an important part of their future, according to 59% of survey respondents. They’re also focused on the financial benefits of owning a home, with 33% responding that they “want to live in a space that I can invest in improving," 31% noting the "need for more space," and 22% expressing the desire to build equity.

Despite the desire to own a home, financial challenges still stand in the way for many millennials, with 44% responding that they don't have enough for a down payment and 34% stating that they haven't been able to find a home within their budget. This points to affordability and lack of homes on the market as significant challenges facing first-time homebuyers, especially this year when inventory is at an all-time low and listing prices have been growing at double digits for more than six months.

The burden of student loans also presents a struggle to many millennials when it comes to saving, with 47% responding that the biggest obstacle to finding a home has been coming up with money for a down payment. The most popular efforts to save include setting aside a certain amount from each paycheck (50%), while 45% said they also cut out discretionary expenses, such as gym memberships and eating out for lunch. Twenty-nine percent put away lump sums from annual bonuses, tax returns and gifts.

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