Young adults still want to break into the housing marketDate posted: 12/12/14 10:15:00 AM
In the face of a tough economy, rising tuition costs and lethargic employment rates, millennials are still interested in owning residential real estate, according to a survey released by the California Association of Realtors.
The survey, which focused on young adults ages 18 to 34, revealed that more than half of all respondents gave homeownership a rating of "8" on an importance scale of 1-10, with "10" being extremely important and "1" being not important at all.
"Despite recent news reports of young adults moving back home to live with mom and dad, millennials haven't completely written off homebuying and still aspire to owning a home," Kevin Brown, president of the association, said in a statement.
Young adults haven't been as quick to the market as past generations, but the survey said the majority of millennials are still interested in buying a home in the next five years. Millennials said the biggest draw to owning a property is additional privacy, the ability and freedom to do what they want with their home and the satisfaction of home ownership.
Surviving in a rugged economy
Still, millennials face major obstacles when it comes to owning a home. According to a report from The New York Times, approximately 20 percent of all people in their 20s and early 30s have moved back in with mom and dad, with six out of 10 young adults still receiving financial support from their parents.
Jeffrey Arnett, a psychologist at Clark University, told the Times that millennials are going about the workforce differently than past generations. Whereas a young adult looking for work a few decades ago might settle for a job they dislike, millennials are much more likely to experiment in a number of different fields. Arnett said this could lead to a much higher job satisfaction in the long run.
"Stop dumping on them because they need parental support," Arnett said. "It doesn't mean they're lazy. It's just harder to make your way now than it was in an older and simpler economy."
One of the biggest obstacles comes from the depreciating value of owning a bachelor's degree. Roughly four decades ago, only 10 percent of Americans earned a four-year degree, according to the Times. In the current environment, around one-third of young adults have acquired - or are slated to nab - a bachelor's degree.
While an American with a degree in the 1970s could be assured a comfortable career, that's no longer the case for the current generation. Many millennials are struggling to find employment while dealing with massive student loans. The Times stated nearly 45 percent of 25-year-olds have student loans with an average debt of more than $20,000.
Millennials are somehow still optimistic about housing
Regardless of the tough economy, most millennials are still confident the housing market will recover in the next few years, according to the survey from CAR. Nearly 60 percent believe home prices will climb in the next year and 63 percent expect home prices to surge in five years.
"What's encouraging is that while many saw their parents or friends struggle through the housing crisis, the majority haven't changed their attitude toward homeownership," Brown said. "Young buyers may have to delay their home purchase, but they eventually hope to own their own home."
The main detractor for millennials and the housing market is being able to secure a mortgage loan. Forty-five percent of CAR respondents said they weren't sure if they could acquire a mortgage in the future, while one-third stated they were unsure if they could land a mortgage with their current finances.
- Winterizing your home and finances - 12/12/17
- Retirement plan options - 11/29/17
- Best time to buy a car: December - 11/29/17
- 6 sustainable ways to save during the holidays - 11/9/17
- Steps that can help prevent identity theft - 11/2/17