The Wild Housing Market Is Scaring Young People Away From Buying Homes: Survey
- Housing Market Slowdown: Only 1% of Homes Have Changed Ownership This Year
- These 5 Cities Have Seen a Huge Drop in Homes for Sale
- 1 in 3 Homebuyers Are Now Paying All Cash: Report
- Why a Record Share of Americans Think It’s a Bad Time to Buy a House
- Half of Homes on the Market Are Selling Within 2 Weeks — Despite High Mortgage Rates
The red-hot housing market is making it especially unlikely for younger Americans to buy homes anytime soon.
A new survey by Money and Morning Consult, a decision intelligence company, found that 48% of Gen Z (those born between 1997 and 2012) and 44% of millennials (born between 1981 and 1996) say they are less likely to buy a home given the state of the housing market over the last two years. That’s compared to 30% of baby boomers and 38% of people overall.
Only about one-quarter of millennial and Gen Z respondents said that the state of today's housing market actually makes them more likely to buy a home, while the rest replied that they do not have plans to buy at all in the near future.
The pandemic-era real estate market has seen prices spike more than 20% thanks to a tremendous surge in demand as many Americans left expensive cities in search of more space — often in warmer, sunnier locations — amid the shift to flexible remote work policies.
A shortage of inventory and an ongoing supply chain crisis has exacerbated the crunch — and the competition. And as mortgage rates rose this spring, homeownership only got pricier.
Millennials and Gen Z struggle to buy homes
The affordability crisis has been especially severe for millennials, a group that now comprises the largest share of homebuyers. The supply of affordable starter homes is dwindling, and with inflation running above 8%, saving for a down payment is more challenging now than in years past. A recent report from Apartment List, a rental platform, found that two-thirds of aspiring millennial homebuyers had nothing whatsoever saved for a down payment in 2021.
In a buying climate where bidding wars are commonplace and more than half of homes are selling above their listing prices, younger buyers with fewer assets are struggling to compete with older, wealthier buyers.
This ultra-competitive market has forced buyers to make decisions quickly, and that’s leading to regrets. A January study from Real Estate Witch found that 82% of millennial homeowners have at least one significant regret about the house they purchased. Of that group, 26% said they regret that their mortgage was too expensive and 30% regret the upkeep costs too much.
It’s no wonder that just 25% of young adults said they believed it was a good time to buy a house this spring, compared to 42% a year earlier.
Of course, regrets about money aren’t just limited to millennials. Among buyers across all generations who purchased homes during the pandemic, 36% believe they overpaid, according to the survey by Money and Morning Consult. That's roughly the double the rate of homeowners who bought before the pandemic and think they paid too much.
More from Money:
More Than One-Third of People Who Bought Homes During the Pandemic Say They Overpaid
