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REALTOR®: Survey finds millennials not ready to forego certain luxuries for home ownership

Wednesday, June 11, 2014

Findings from a recent consumer survey indicate millennial home buyers face big financial challenges to home ownership; yet, the generation of young adults ages 18-34, would rather ask their parents for help with the down payment than give up certain luxuries.

According to the online survey conducted by Ask Your Target Market on behalf of real estate website Trulia, 60 percent of millennials say their finances are the biggest obstacle standing between them and home ownership. Lack of savings, a high debt load and poor credit are reasons why millennials are unable to raise the down payment needed to purchase a home.

Half of millennials surveyed said they would ask their parents or even their grandparents for help. For those unable to ask parents for help, 37 percent plan to work a second job in order to save up, and 22 percent said they will use a state or federal government program to help achieve the American dream of home ownership.

The survey found even though finances are tight, millennials aren't ready to give up a few luxuries to help save for their down payment. Sixty-five percent of those surveyed wouldn't give up their car to help save for a down payment; nor would they give up their smartphone (45 percent), cable (20 percent), and even their Netflix subscription (15 percent). Other items young adults feel they "have to have" include vacations (14 percent), eating out/take out (13 percent), clothes shopping (10 percent), organic shopping (10 percent), a gym membership (7 percent) and a morning latte/cappuccino (5 percent).

It also appears half of those surveyed don't know how much money they need for a down payment. Among the majority of those that do know, nearly two in five said they would put less than 10 percent down toward a home.

Michael Corbett, Trulia's real estate expert, cautions when buying a home today, it is critical to be conservative and to safeguard your purchase. "Forget the 'no money down,' or the 5 and 10 percent down payment purchases. The goal should be a 20 percent down payment. It gives you some equity right from the start, gets you a lower interest rate, reduces your monthly mortgage payment and lets you avoid PMI monthly fees. All of which really adds up to significant savings."

Education is an important part of the home buying process, said David Tonna, president of the Silicon Valley Association of REALTORS®. "Home ownership is a big responsibility. When considering buying a home, buyers need to do their homework and look at their long-term financial goals. If they are serious about buying a home, they need to look a few years down the road, put aside that money and make adjustments to their lifestyle. They will need to forego some of the luxury purchases in order to accumulate that down payment and other costs associated with home ownership."


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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