Millennials are increasingly stepping into homeownership, with approximately 37% of individuals aged 25 to 34 now owning a home. However, a recent study from Bank of the West reveals that nearly 70% of these homeowners wish they had thought twice before making their purchase. The sentiments of regret stem largely from financial strains associated with homeownership.
Around 40% of those surveyed indicated that their most significant regret was overspending on their down payment. One in three admitted to tapping into retirement savings to gather enough funds for their home. Many respondents also underestimated the continuous costs of owning a home, such as repairs and utility bills. Alarmingly, about half of the participants reported settling for homes that they didn’t truly love or that had existing issues.
Is anyone really surprised by these findings? For years, we’ve been aware of the financial struggles that this generation faces. Millennials are the first generation in U.S. history to be worse off financially than their parents. Nearly half of them aren’t saving for retirement, a situation exacerbated by student loan debt that has soared by 84% compared to previous generations. The average student debt has jumped from $15,000 to $27,000 since 2008. With such burdens, many millennials find their credit scores suffering, complicating their ability to secure favorable home loans.
Simultaneously, the median sale price of homes in the U.S. has skyrocketed. The current median price is $238,000, up from $166,000 in 2013, marking a staggering 43% increase in just five years. Given that it can take up to five years to save for a home, it’s no wonder many millennials feel priced out despite their efforts.
The feedback from millennials regarding this study is a collective, “no kidding.” We don’t need studies to tell us about our challenging financial circumstances; we live it day in and day out. What’s truly needed is reform in education and healthcare to help us gain the financial stability that previous generations often take for granted.
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Summary
Millennials are increasingly becoming homeowners, yet a significant majority express regret about their purchases, primarily due to financial strains tied to down payments and ongoing costs. Many feel burdened by student debt and rising home prices, leading to a struggle for financial stability.