Despite the fact that they are generally waiting longer than previous generations did to purchase homes, the number of Millennials who own homes is steadily growing.
Data from CivicScience tracking the residential status of more than 116,000 U.S. adults ages 18-34 shows that the percentage of homeowners in this age group has risen from 28% at the start of 2017 to 34% today (see the dark blue line below) which is comparable to other sources.
Taking the data at face value, it appears that as Millennials move out of their parents’ houses, some are buying homes while slightly more (38%) are choosing to rent. And life stage has a lot to do with that — CivicScience data shows that about 60% of Millennial homeowners are married, compared to just 25% of Millennial renters. At the same time, a little over 50% of Millennial homeowners have children, compared to 25% of renters.
The fact that Millennials are waiting longer to marry and have kids than previous generations goes hand-in-hand with the high percentage of renters. Even so, other research also suggests that Millennials are coming up in the housing market, taking on nearly half of all new mortgages.
However promising that may be to the housing market, recent headlines have reported that the majority of Millennial homeowners regret buying their homes. One report placed buyer remorse of adults ages 23 to 38 at 63%, citing factors like hidden fees, unaffordable homes, and less than ideal locations and home size.
Weighing in on the topic, an online poll by CivicScience looked at over 1,400 adult homeowners in the U.S. and found buyer remorse to be slightly more modest. Among all adult homeowners, about one-quarter express some level of regret over their most recent home purchase — less than 10% claim to have “a lot” of regret, while 18% have “some.”
Millennials certainly have higher levels of buyer remorse than older generations, yet not as high as previously reported estimates. The CivicScience study found that 34% of adults ages 18-34 have regret over purchasing their home, compared to 29% of 35-54-year-olds and 21% of those 55 and older.
Taking a more in-depth look, it’s clear that the younger you are, the more likely you are to have significant regret over purchasing your home. Of course, that’s not surprising — the older you get, the more experience you have with navigating the ins and outs of homebuying.
The study found that repairs/renovations and maintenance costs are the biggest problems that homeowners have with their living situation, making up about 18% of homeowners. In comparison, renters claim that the cost of rent is the most problematic.
Narrowing in, homeowners who have a lot of regret over buying their home likewise say that needing repairs/renovations (“needs a lot of work”) is the single most problematic aspect of their living situation.
Another big problem for those with buyer remorse is location, which is nearly as cited as repairs/renovations (“needs a lot of work”); 13% say their home isn’t in the right area for themselves or their families. Interestingly, the study shows there isn’t much difference at all among regretful homeowners in cities versus in suburbs, while rural areas are slightly more likely to be happy with their home purchase.
Also ranking up there when it comes to problems among regretful homeowners are the cost of mortgages, the study shows. Purported rising monthly costs of owning a home and a host of other variables, particularly those affecting young homeowners, like student debt, all play a hand.
This cocktail of factors — having to put extensive work into the house, unhappiness over location, and the cost of a mortgage — all contribute to buyer remorse, which is more endemic to Millennials. The question is, to what effect? Is buyer remorse a normal rite of passage among young homeowners, or will it impact the housing market going forward?
