Paying off debt and having the financial means to retire comfortably are also part of their American dream
While a majority of millennials are reluctant to invest their savings in the market, homeownership has emerged as the cornerstone of their American dream, according to the Bank of the West 2018 Millennial Study.
The survey found that 66% of millennials are equities-shy, but 42% of them have invested in real estate as the most popular ingredient of their investment portfolio. Paying off debt (51%) and having the financial means to retire comfortably (49%) were cited as the second and third most critical components, respectively.
However, some millennials are placing their other financial goals at risk by prioritizing their desire to own a home. For example, the survey found that one in four is willing to withdraw or borrow against retirement funds to finance down payments for a home.
"Millennials are so eager to become homeowners that some may be inadvertently cutting off their nose to spite their face," said Ryan Bailey, head of the retail banking group at Bank of the West. "The fact that nearly one in three millennials who already own their homes have dipped into their retirement nest eggs to finance their down payment is alarming."
Millennials can be seen as victims of bad timing, according to the report. They experienced the effects of a market downturn and were unable to close on a home when prices and interest rates were low. Now, millennial homebuyers face the changes brought about by the Tax Cuts and Jobs Act. They are now unable to deduct state and local property taxes from federal tax bills.
In spite of the challenges, four in 10 of millennials are already homeowners, and 92% say they are interested in owning a home someday.
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