Many admit 'buyer's remorse' after they've made their purchases.
The American Dream for millennials is having a mortgage for a home they have doubts about buying.
Homeownership is the most popular part of a millennial’s investment portfolio, according to Bank of the West. Fifty-six percent believe it’s the biggest goal of achieving the American Dream.
“Millennials are so eager to become homeowners that some may be inadvertently cutting off their nose to spite their face,” says Bank of the West’s executive Ryan Bailey. “The fact that nearly one in three millennials who already own their homes have dipped into their retirement nest eggs to finance their down payment is alarming.”
Millennial homebuyers’ remorse
It’s alarming because millennials already get a bad rap for being terrible retirement savers. Even though they’re proving time and again that they’re doing much better than we think they are.
However, it doesn’t mean they’re doing well in all aspects of their finances. Sixty-eight percent say they regret their home purchase and wish they prepared more before buying. But some of those people didn’t even look at their homes before buying them, which may explain why they aren’t confident about their decisions.
“Time has worked against millennials when it comes to home-buying,” the study says. “Most millennials weren’t ready to close on a home when housing prices were at their lowest and interest rates hovered just above zero. And for those who may now feel ready, the new Tax Cuts and Jobs Act eliminates some of the homeownership tax breaks, removing the ability for homeowners to deduct state and local property taxes from federal tax bills.”
One way they want to avoid these major money blunders in the future is to have a better handle on their finances. And they’re hoping their jobs can help.
Seeking financial guidance from work
Eighty-three percent of younger Americans believe having a financial advisor can have a major impact on their financial confidence, says a survey from life insurance company Guardian. This, in turn, will help them reach their financial goals. And they want their employers to give them those benefits.
“Millennials see financial advisors as a source of sound financial advice and as a partner who can help them achieve their short and long-term financial objectives,” the survey says. “[They] say having a detailed financial plan is equally as important to them as getting a raise. Sixty-two percent say that getting financial advice from their employer would increase their financial confidence.”
Employers are already a big reason why millennials are saving. And young people are already out-saving their older counterparts. But with the constant struggle to figure out the top financial necessities — like buying a home or saving for retirement — many millennials are making rash decisions about where their money goes.
As the Bank of the West survey says, young people are taking money away from their retirements to buy homes, mostly because homes are becoming increasingly less affordable. But millennials are the ones who need the affordability the most. This generation is the largest group of homebuyers.
One of the top reasons Americans can’t retire is because of their credit card debt. Don’t let debt hold you back from achieving your dreams.
Meet the Author
Article last modified on October 9, 2018 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Millennials Are Borrowing Against Their Retirement Savings to Afford Homes - AMP.