ST. LOUIS–High interest rates have become the number-one obstacle between Millennials and home ownership, according to a new survey of 1,000 homebuyers.
Just 29% of Millennials in 2023— compared to 59% in 2022 — expect buyer competition to be a barrier to homeownership in 2023, according to Real Estate Witch, which conducted the study.
Among the findings in the study:
- 92% say inflation has altered their home-buying plans, with 28% delaying their search as a result.
- 75% of Millennials think the housing market is in a bubble that could burst in 2023, ushering in an era of greater affordability. “But experts suggest tempering that expectation. Home prices are unlikely to plunge drastically, and borrowing may become even more expensive as additional interest rate hikes are on the way,” the company said.
- · 71% say home buying makes them feel stressed. A majority of Millennials (51%) have been “reduced to tears” during the home-search process, and 44% say it has negatively affected their personal relationships.
- 82% of Millennials who own a home have regrets about their purchase, with the most common regret being their interest rate is too high (22%).
- 62% plan to put down less than 20% on a home. Only 34% of Millennials did the same in 2022, when they faced stiff competition with other buyers.
- 54% have less than $10,000 in savings — a percentage that has tripled since 2022, when only 18% of Millennials had that little.
- 20% have $0 in savings.
- The percentage of Millennials who would buy a home sight unseen dropped slightly from 90% in 2022 to 86% in 2023.
- About 65% of Millennials would buy a fixer-upper — a sharp decrease from the 82% who said the same in 2022, Real Estate Witch said.
- 16% of Millennial homeowners who bought a fixer-upper regret it.
- 23% plan to buy a home that costs more than the national median of $455,000, but to afford such expensive homes, 38% anticipate having to max out their budget
For the full report, go here.
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