According to recent data from the Federal Reserve, the average age of homebuyers rose to an all-time high of 55 in 2020—and only 31% of those were first-time buyers, the lowest share since 1987. Millennials, while the largest generation in the U.S., are lagging behind their older counterparts when it comes to homebuying, and there are several reasons why, including market volatility, affordability, high mortgage rates and low inventory. A recent report from Rocket Homes surveyed prospective and recent homebuyers to explore the specific factors that have induced homebuyer hesitation.
- The need to save for a down payment is the primary reason why homebuyers are holding off, according to 59% of respondents. Saving for a down payment was the most stressful part of the homebuying process for recent first-time buyers.
- 52% of younger Americans were delaying buying a house to avoid taking on debt.
- This was almost 10 percentage points higher than the average buyer.
- 46% reported that credit card debt was the biggest hinderance to purchasing a home. 54% of prospective homebuyers are waiting for prices to drop before they move forward
- About 72% of those who bought homes within the past two years received help from family with their down payment.
- 46% continue to receive help from their family with mortgage payments.
Buying a home is a big investment that could potentially pay off very well in the long run,” said Molly Grace, author of the report, “Budgeting smartly, improving low credit scores and finding the best financing options can help more Americans realize their dream of becoming a homeowner.”
Grace also notes, “Cautious behavior from young perspective homebuyers belies an economic anxiety that is common among a generation that has suffered through wage stagnation, increasing student loan debt and economic turmoil that has accompanies the COVID-19 pandemic.”
Click here to read the full report.