New Research Shows What Millennials Are Willing to Do to Buy a Home in 2025
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Millennials are navigating one of the toughest housing markets in recent memory, and new research from Real Estate Witch, an online publication owned by Clever Real Estate, highlights just how challenging it has become.
With soaring home prices, high interest rates, and limited inventory, only 21% of millennials believe they can afford homes—a sharp drop from 52% in 2024.
Let’s dive into the numbers and trends shaping the millennial homebuying experience.
The Affordability Crisis
Affording a home has become a daunting task for millennials. The median U.S. home price hovers around $420,000, but 68% of millennial buyers are planning to spend less than $400,000—a notable increase from 57% in 2024.
Despite these efforts to budget, the challenges are mounting. Nearly all the millennials surveyed (96%) have concerns about the process of buying a home, with many worried about not finding an affordable option (44%), unexpected or hidden costs (35%) or not being able to afford a mortgage (34%).
The biggest barriers to homeownership according to millennials:
- 52% say “homes are too expensive”
- 46% blame elevated mortgage rates
- 44% cite “saving for a down payment”
- 34% point to high property taxes
- 33% say there aren’t enough homes that fit their budget
- 28% say qualifying for a mortgage is their biggest hurdle
- 27% say they don’t earn enough to afford a home
- 26% cite a “very competitive” market for buyers
- 25% blame a lack of “homes that fit my criteria”
- 23% have a limited knowledge of homebuying
- 21% blame high home insurance costs
- 19% say there aren’t any homes in their desired location
Nearly half of millennials in the survey (45%) feel their generation faces the toughest barriers to homeownership, with 33% pointing to boomers as contributing to the affordable housing crisis.
Regrets and missed opportunities also weigh heavily on millennials. 67% regret not buying when prices were lower, while 32% expect to max out their budgets in 2025.
It’s clear that financial constraints are reshaping millennial dreams of homeownership.
Willing to Compromise: Millennials Get Creative
Faced with these financial hurdles, millennials are showing a surprising willingness to compromise. According to the Real Estate Witch report, here are some of the things millennials are willing to do to own a home:
- 57% are open to purchasing fixer-uppers.
- 47% would get a second job
- 42% would buy a smaller home than desired
- 41% would consider buying a home with asbestos or pests.
- 40% would buy a home “without all my desired features”
- 35% would move to a different city
- 28% would move to a rural area
- 25% would move to a different state
- 18% are willing to rent out a room inside their home
- 16% would move in with their parents (to save money)
- 14% would delay having kids
- 11% would delay their wedding or elope
- 9% would create a GoFundMe account to raise money
- 9% would move to a less safe neighborhood
Also, more millennials would prefer homes near cemeteries (34%) or railroad tracks (26%) than near their ex (25%). And 60% outright avoid homes near their in-laws.
These compromises reflect the intense pressure on buyers to enter the market, even if it means sacrificing their ideal living situations.
Interest Rates and Market Sentiment
High interest rates continue to cast a shadow over millennial homebuying plans. 74% believe now is a bad time to buy due to elevated rates, but there’s optimism on the horizon: 76% say they’d be enticed to buy if rates fall in 2025.
In other notable trends, the willingness to offer an over-asking price has dropped significantly, with only 56% willing to do so compared to 79% in 2024.
Time will tell whether President Trump’s Day One executive order on the cost of living crisis will lead to a decline in mortgage rates and reduced homebuilding costs, potentially lowering the barriers to homeownership for cash-strapped home buyers.
Posted by Sarah Lentz | Jan 23, 2025 | Housing Market
https://nowbam.com/new-research-shows-what-millennials-are-willing-to-do-to-buy-a-home-in-2025/
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