Many Millennials Are Putting Off These Milestones Until They Buy a Home

April 19th, 2019
first-time-home-buyer
iStock/Deagreez

Many young Americans want to adopt a pet, get married, and have a child—but they’re waiting to become homeowners first. And with home prices reaching record heights in many parts of the country, that can be a tough goal to achieve.

Almost a quarter of millennials prioritize buying a home over getting hitched, according to a recent survey from LendingTree. About 27% want to become homeowners before having children, while 22% want to have their own home before getting a pet.

The online financial services marketplace surveyed nearly 2,100 Americans aged 22 and older who are thinking about buying a home in the next two years.

“Some folks like to be very prepared for things … and reduce the uncertainty,” says LendingTree’s chief economist, Tendayi Kapfidze. “People want stability when they have children, and one of the ways you have that stability is by owning a home.”

Other big findings: 43% of respondents who are first-time home buyers, of all ages, are single; about a quarter have lousy credit; and the overwhelming majority, 79%, are in debt.

“People are getting married at later ages or are separated or divorced,” says Kapfidze. But he wasn’t terribly worried about the debt—provided it’s not too high and is being managed responsibly.

“The majority of people are in debt. If you own a car and you have a car note, you’re in debt. Even if you lease your car, you’re in debt.”

First-time buyers, who tend to be younger, are typically the most cash-strapped, so they’re looking for homes priced at $150,000 or less. That’s just half of the national median list price of $300,000 as of March 1, according to the most recent realtor.com® data.

So it’s not surprising that about 85% of these buyers don’t mind picking up a fixer-upper to save some much-needed dough.

Many first-time buyers also don’t have the best credit. Only 15% of these buyers have a very good or exceptional credit score, which starts at 740. Meanwhile, just over half have very poor or fair scores, which run from 300 to 669. (On the flip side, about 42% of existing homeowners have very good or exceptional credit.)

“There’s a correlation between credit scores and age,” says Kapfidze. “If you’re very young and you haven’t had a long time having credit, your credit score is going to be a little weaker.”

And not having enough money in the bank can cause folks to delay buying a home. About a third of prospective buyers said that they don’t make enough to afford a home, while just over a quarter blamed a lack of savings.

Many blamed student loans and credit card debt for siphoning off money that could otherwise go to a down payment fund. Others said they weren’t ready for the commitment of a mortgage or settling down in one place. Then there’s the trouble with finding an abode within their budget.

“People are finding there’s not a great supply of entry-level homes that are affordable,” Kapfidze says. “That’s holding some folks back from homeownership.”

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