And down payments continue to challenge those who want to buy
For most millennials in the US owning their own home remains an important part of the American Dream.
But for some, they have already dismissed the idea of homeownership and believe that they will always rent.
A new report from Apartment List shows that the share of millennials who are forever-renters is increasing, with 12.3% planning that course, up from 10.7% in 2018.
The study analyzed 34 metros and in 5 of them - San Jose, Detroit, St. Louis, San Francisco, and Portland – more than 16% of millennials said they plan to stay renting.
Meanwhile, in the southern metros of Atlanta, Charlotte, and Nashville, less than 6% renters plan to forgo homeownership.
High home prices top the list of reasons for abandoning the idea of homeownership with 69% saying they can only afford to rent.
Down payment struggles
Meanwhile, 70% of those who say they do want to own a home are waiting due to affordability challenges, especially the down payment with 48% of millennial renters who aspire to buy a home reporting they have no savings set aside for a down payment and 31% have less than $5,000 saved.
The study estimates that 25% of millennials will be able to afford a 10% down payment within 5 years based on their current savings and total additional monthly savings.
Student debt also remains a barrier for the 57% of respondents who have outstanding education loans. Those without this burden are saving around $100 per month more than those who do.
