According to a recent survey conducted by loanDepot, 52% of Millennials (born between 1981 and 1997), cite no longer wanting to pay rent and being ready to start a family as two top drivers motivating them to start looking into homeownership.
However, half of those surveyed are anxious about the expense of real estate and mortgage payments, with only 18% saying they think a home purchase is affordable for them.
As for barriers to entering the housing market, Millennial renters are concerned about having enough money for a down payment (63%), knowing where to start the process (48%) – with 56% saying they’d start with a Google search – poor credit history (43%) and too much existing debt (38%).
“It’s clear from the survey results that Millennials have a lot of anxiety built up about the home-buying process,” says David Norris, loanDepot’s head of retail lending. “There is good news, however, as there’s more flexibility than most Millennials think regarding how to qualify for a loan and what’s needed for a down payment.”
Of those surveyed, 49% currently have a home mortgage, yet just 27% said they felt knowledgeable about the home purchase process when they began. For those who have already made the jump to homeownership, they wished they had known more about interest rates (55%), types of loans available (47%) and how the pre-approval process worked and what down payment they’d need (45% each) before setting out.
About 54% of Millennials say they plan to ask their parents about how to buy a home, with slightly fewer, at 52%, saying they would first turn to a mortgage broker or company.