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Millennials are struggling to afford down payments

On Behalf of | Jun 2, 2017 | Residential Real Estate

Experts are reporting that the majority of millennials in Delaware and across the country don’t have enough money to afford a new home down payment. The millennial generation, which remains one of the hardest hit by the financial recession, continues to struggle with employment, income and savings. Despite these drawbacks, the generation seems to remain optimistic about home ownership, with 80 percent of millennials reporting a desire to eventually own a home.

The data about millennials and home ownership comes from a survey done by Apartment List. According to that survey, about 70 percent of millennials have saved only $1,000 or less toward a house down payment. Even those in the older segment of the generation, ages 25-34, probably wouldn’t be able to afford a down payment of as little as 10 percent within three years. As few as 15 percent would be able to save that much within a year.

In general, saving tends to be a challenge for the millennial generation. About 40 percent of millennials don’t save any money per month, and that trend isn’t changing even as they get older. While the study did not examine the factors behind this lack of savings, it does mean that most millennials will be unlikely to afford a house until late adulthood, which is later than in previous generations. Those who do end up owning a house may have to seek financial help from parents, friends or family members.

A tight budget makes securing a good deal on residential real estate all the more important. Millennials may be able to afford a house if they begin to acquire savings, budget correctly and gain a better understanding of how the buying and selling process works. A real estate lawyer may be able to help with the process if any legal obstacles arise.