Real Estate

Why aren’t more Millennials buying homes? A bunch don’t understand mortgages

Over half chalked it up to lack of savings or low income

While the number of Millennial homeowners is rapidly increasing, a recent survey from LendEDU showed that 42% have yet to buy a house. 

In the survey that was taken by 1,000 people between the ages of 23 and 38, almost 90% of the non-homeowners responded that they aspire to homeownership. When asked how many years they were away from that goal, the largest portion, 65%, estimated it would be one to five years before they were homeowners. Their biggest reason for the delay: finances

It was concerning, albeit not surprising, to see debt-related answers take up a combined 21% of the answers,” LendEDU said in its report. “The millennial struggle with debt, especially related to student loans, is widely publicized, and it’s quite obvious that this uphill battle is having secondary effects on the wider economy.”

Of course, not all of the financial pause was due to debt. Of those waiting to buy a home, 26% Millennials simply felt they had insufficient savings. Other responses included 24% citing low income, 17% with low credit and 8% saying they hadn’t found the right home yet.

The study also looked into Millennials’ knowledge of mortgages. This portion of the survey started with a fundamental question: “Do you believe that a lack of knowledge when it comes to homeownership and mortgages has prevented you from already owning a home or taking longer than expected to become a homeowner?”

To this, over half of the surveyed Millennials who are not homeowners replied “yes.” This response was further confirmed when the same group was asked what they thought a minimum down payment amounted to. The average answer was 37%. 

Millennial respondents also estimated that the mortgage process takes a lot longer than it actually does, with the average answer from our survey being 72 days from start to closing,” LendEDU’s report said. 

And despite the generation being largely regarded as “digital natives,” 52% wanted an in-person mortgage experience. 

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