They’re graduating from college, starting new jobs, getting married and having kids. But one life goal that’s eluding a lot of millennials is homeownership, according to a new NerdWallet white paper.
It’s not that millennials don’t want to own a home. In fact, NerdWallet, a personal finance website, found that most millennials would like to buy a home but think they can’t afford it.
In its analysis, NerdWallet looked at a number of surveys and data from government agencies and Fannie Mae to examine commonly held beliefs about the decline in homeownership among younger first-time buyers. Millennials— those born from 1981 to 1997 — are expected to form some 20 million households by 2025.
A Fannie Mae survey found that 57% of young renters cited financial reasons for not buying a home. Those reasons included poor credit, high down payment costs, a low monthly income and too much existing debt as the main obstacles. But even facing these perceived roadblocks, young renters in that same survey are considering buying a home, and 49% said their next move would likely be into a home they own.
“Contrary to popular belief, millennials still view homeownership as a desirable goal, just like previous generations, but a lot of them simply don’t know they have options to get their foot in the door,” says Chris Ling, mortgage manager at NerdWallet.
“That’s where NerdWallet can help. The mortgage tools and resources we offer consumers are aimed at educating potential homebuyers of all ages about what’s involved — and what options they have to qualify for the loan that best meets their needs.”
If you’re a first-time homebuyer, you can research what your monthly payments will be with NerdWallet’s mortgage calculator, while a real-life affordability tool can help you determine “How much house can I afford?” Those struggling with student loan debt may qualify for income-based repayment options, too.
Additionally, the Consumer Financial Protection Bureau has a helpful resource page to guide you through the ins and outs of the process, and you can get a step-by-step overview of homebuying from the U.S. Department of Housing and Urban Development.