[POWER MORTGAGE]
MILLENNIALS WANT TO BUY BUT THEY CAN’T TRUST LENDERS OR THE HOUSING MARKET
I
t is safe to say that the housing market in the United States is at a crossroads. Giants in the housing industry report up and downswings in the parameters of the home prices, starts, and sales. Even though data seem to paint both an unflattering and flattering general picture in all the same month, one thing is clear, millennials are not buying homes in the number the previous generations did. One of the most defining characteristics of the millennials generation’s experience with the financial and housing ecosystem is that of fear. Which has ultimately led them to develop a pervasive mistrust of banks, lenders and the housing market overall. This generation may be the first one to say “meh” to the homeownership aspect of the American dream. This can be well reflected in the percentage of sales to the first-time homebuyers which dropped below 30 percent compared to the averaging 40 percent. But, that shouldn’t be taken to mean that millennials are not interested in buying homes, the desire is 94
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there. In fact, according to a survey done by the National Association of Realtors (NAR), 74 percent of the millennials think they’ll own home before turning 35. One of the ma jor reasons why millennials are opting out of the housing industry is the mistrust in the financial institutions based on what they have consistently witnessed during the housing crisis and the fear of not qualifying for a mortgage because of the student loan debt and a struggling job market. When you put all these factors together, it makes
it easier for millennials to feel comfortable living with their parents. To put this into perspective, Even Financial conducted a study, where it found that 92% of millennials stated that banks could not be trusted, over half said that they didn’t know anyone they could turn to for financial advice. In another survey by Bankrate, nearly half (45 percent of millennials aged 23-38) identified the skyrocketing prices of homes and the high cost of living as one of the ma jor factors and barriers to buying a home compared with other generations. About
THE POWER IS NOW MAGAZINE | MARCH 2020
