Millennials Saving for Home Ownership
“Its shocking. Every time we thought we have figured out probably the most analyzed cohort in history they throw us a curve ball.”
-Tim Rood, Chairman, The Collingwood Group
When we here at Collingwood set out to survey millennials about their willingness to save for a down payment we thought for sure they would not be willing to give up their Starbucks, their data plans, or their TV. It turns out we were wrong. Collingwood’s Chairman, Tim Rood, spoke with Bloomberg Radio this morning to discuss the results of our Millennial Mixup survey. “The American Dream is alive and well,” Rood said, as about 70% of the millennials we surveyed said that they were very likely or somewhat likely to give up some of those modern day conveniences such as Starbucks and their cell phone plans, and cable TV to save money for a down payment.
“Millennial’s…appetite for homeownership and their desires to own a home seem to be right in line with previous generations,” Rood continued. It’s challenging for millennials to save for a down payment because of the price of rents in urban neighborhoods. That said, millennials still see home ownership as a good investment. Rood noted that millennials, “Don’t have many legitimate investment opportunities but home ownership still seems to be a good one.”
When it was mentioned that millennials are outpriced in at least 13 metropolitan areas because the housing prices are so high, Rood said, “There’s no doubt that some of the hottest markets obviously are being driven by low supply and high demand from these millennials that want to rent in these hip, urban areas.” Urban areas with great amenities and walk-ability are still popular. Young people want to live in this area which is driving up prices. Rood says that, “The markets that you see from the housing stand point that are really booming are the ones that have the most affordable entry points.” Markets that have home price affordability, good employment numbers, and robust economies are the markets that are growing the most. Rood explains that, “In places like Denver, Houston, Des Moines, Atlanta, those are the ones that from a housing standpoint you are seeing folks really get in because they are affordable and there’s a good economy.”
To see the full results of The Collingwood Group’s Millennial Mixup survey download the infographic here.