It’s just this simple: Many millennials looking at the high cost of housing and their heavy student loan burden don’t believe they can afford to buy homes.
Apartment List surveyed more than 10,000 people between the ages of 23-38 across the nation for the online real estate company’s latest report on millennials and the housing market.
Like earlier generations, millennials want to buy, Apartment List found. But across the country, 70 percent of millennial renters who plan to do so one day say they are waiting because they can’t afford it now. Nationally, 12.3 percent of millennial renters said they never expect to buy, up from 10.7 percent a year ago. Of those who plan never to buy, 69 percent said it’s because they can’t afford to.
In metro Denver, Apartment List found 12 percent of millennial renters expected to remain tenants for life. Of those in the Denver area who do expect to one day purchase a home, nearly half have yet to start saving for a down payment. Just 20 percent of Denver’s millennial renters will be ready to put down 10 percent on a median-priced starter home in the next five years, Apartment List calculated.
Apartment List found that nationally 57 percent of college-educated millennials were still paying off student loans. Their peers lucky enough to be free of such debt were the most likely to have saved for a down payment on a home and averaged more than twice the total savings of those who were debt-burdened. Apartment List found a wider gap between those with and without student debt than between those with and without a college degree.
If student loan debt payments among metro Denver millennials were instead put towards savings, Apartment List estimates the percentage of renters here who would be ready to buy a home would rise from 20 percent to 29 percent.
Apartment List researcher Rob Warnock described millennials as responding to “the collapse of the housing market, quick growth in the cost of housing, and worsening income inequality.”
“By the time millennials were old enough to want to buy a home, many were skeptical they could afford to do so,” Warnock wrote. “This economic uncertainty-characterized by relatively low homeownership rates, delayed marriages, and smaller families-has become a central tenet of the millennial identity.”