A record low number feel it’s a good investment.
Young Americans think homebuying hurts their health, keeps them from building a family, and might force them to move away.
That’s what equity protection company ValueInsured found after surveying millennials about the value they see in homes. The results are grim…
- Only 48 percent of millennials believe buying a home is a good investment
- That’s an all-time low.
- And only 39 percent of those who want to buy a home think now’s the right time.
“Conventional wisdom assumed millennials were buying homes later because they chose to get married and have children later,” says ValueInsured’s CEO Joe Melendez. “New research now suggests homeownership may be the cause, not the effect, of delayed family formation.”
Millennials aren’t helping the situation…
Their low credit scores and late payments make it harder and costlier for them to buy a home.
Credit bureau Experian studied the way millennials behaved with their loans and how it affected their homeownership.
- Only 15 percent of millennials actually have mortgages
- And less than half of those (39 percent) who don’t own homes have good credit to help them do so (higher than 661, says Experian).
And it’s causing them some real anxiety, according to ValueInsured.
- Nearly one in four (23 percent) millennials think homebuying means delaying having kids.
- 32 percent don’t think they can save for a house and at the same time “afford a healthy and balanced diet.”
- And 31 percent “seriously consider” they have to relocate to afford a house.
But before they pick up and skip town — to anywhere but Hawaii, perhaps — they should take a good hard look in the mirror. With home prices hitting record highs, their personal credit is increasingly crucial to prospective lenders.
“Often, young people start their credit journey with a couple of mistakes first,” says Rod Griffin, an Experian director. “But in the end, these mistakes create opportunities to learn how to use and build credit responsibly.”
…But can they?
Young people come across some unique obstacles to homebuying, like the 7 Common Challenges Millennial Homebuyers Face.
But after looking at the stats, Experian actually calls its results “good news.”
“We’re seeing that small changes in financial behaviors such as building a history of on-time payments and improved credit practices can help lenders shift from viewing millennials as high-risk to low-risk relatively quickly,” says Experian VP Michele Raneri.
Easier said than done, of course — millennials have to contend with student loans on top of their other obligations. In fact, research from last year showed that student loans kept young people from buying homes.
Remember: Missing just one payment can result in a blow to your credit score. Recent research from credit scoring company FICO shows many millennials are on the cusp of missing those payments. And they’re otherwise barely improving their situations. As Debt.com reported, “Sixty-three percent with student loans saw no improvement to their credit score over a year, while 15 percent had a 40-point drop.” The piece goes on to list the ways FICO scores our credit in the first, which is a good thing to know if you’re looking to repair it.
Don’t let bad credit hold you back from buying your dream home. Let Debt.com connect you with the right credit professionals to boost your score.
After you’ve got a handle on how that number is arrived at, begin attempting to increase it.
Money management resources abound. Before paying for a financial advisor, check out Debt.com’s Education Center on improving personal credit.
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Article last modified on October 16, 2018 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Millennials Are Less Interested in Buying Homes Than Ever Before - AMP.