It’s a well hashed-out narrative in the media today, which deepens with every new home sales report: the average age of first-time homebuyers is rising as Millennials face several obstacles in their path to home ownership.
Saving for a down payment has been tougher for Millennials than for their predecessors. According to a survey by the National Association of Realtors, 57 percent of first-time homebuyers said that student loans delayed their saving for a down payment. According to an economist from Zillow, first time home buyers are getting older, with the average age rising from 31 years old to potentially as high as 34 in the next few years. The Wall Street Journal wrote recently that the share of first time homebuyers in the market fell from 50 percent in 2010 to 33 percent in 2014.
With this in mind, Credit Karma teamed with survey company Qualtrics in early July to ask 500 Millennials (ages 18-34) and 500 Baby Boomers (ages 50-65) in America about their attitudes toward home buying and home ownership.
The most heartening headline from our research was that despite all of the reports to the contrary, Millennials still value and desire owning a home. Ninety-two percent of Millennial couples we spoke to plan on buying a house, while only one percent had unequivocally ruled it out. Having their own home factors in huge in how Millenials measure their own financial progress in life: 83 percent saw it as an essential part of what defines financial success.
When we looked at our own data to quantify how many Millennials are buying homes and at what rate, we saw that the rate of home ownership differed significantly depending on where you were in the country. Just 6 percent of Millennial Credit Karma members in New York and Washington DC who pulled their credit profile between July 2014 and July 2015 had a mortgage, compared with 17 percent of our members in Utah and Wyoming.
Our July survey also showed that Millennials need more assistance to buy a house than previous generations; Millennials are two and a half times more likely to have a parent help them with buying a house than Baby Boomers (20 percent to 8 percent). There also appeared to be generational uncertainty in our survey about what credit score they need to qualify for a mortgage. More than half of Millennials surveyed said that their credit score was over 640, the minimum FICO score required from Sallie Mae to qualify for a mortgage, but when asked only 14 percent of Millennials said that they were certain they would qualify if they applied.