SANTA CLARA, Calif.,
April 4, 2018 /PRNewswire/ -- As
interest rates and home prices continue to rise, millennial home
buyers are more likely than older buyers to adjust what they are
shopping for, according to a new survey released today from
realtor.com®, a leading online real estate destination.
Two factors contributing to this market sensitivity are
millennials' likelihood to carry more student loan and other debt
and put less down than other buyers.
According to the online survey of more than 1,000 active buyers
conducted in March by Toluna Research, 79 percent and 83 percent of
respondents of all ages, respectively, said rising interest rates
and home prices will impact their home search. That rises to 92 and
93 percent for buyers ages 18 to 34 years old. Only 17 percent and
21 percent of all buyers indicated prices and rates would have no
impact.
"Existing debt and lower down payments leave younger shoppers
more exposed than others to the impact of rising mortgage rates and
record-high home prices," said Danielle
Hale, chief economist for realtor.com®. "These
obstacles won't prevent millennials from finding and buying homes,
but most will have to adapt to these challenging market conditions
by adjusting their home search."
Rising prices and interest rates impact the majority of
buyers
When asked how their search would be impacted by
rising prices, 41 percent indicated they have to buy a smaller
home, 35 percent need to look for a less expensive home, 34 percent
have to look in a different neighborhood, 33 percent need to put
down a larger down payment, and 31 percent have to increase their
monthly mortgage budget.
Survey data also shows rising rates have a greater impact on
millennials than on buyers 55 years or older. As a result of rising
rates, 37 percent of millennials said that they have to look for a
less expensive home, compared to 24 percent of buyers 55 and older.
Thirty-five percent of millennials have to look in a different
neighborhood, compared to 18 percent of those 55+. Thirty-three
percent of millennials have to look for a smaller home, compared to
23 percent of boomers.
Millennial buyers carry more debt than
others
Millennial buyers are also more likely to report
carrying each of the seven categories of debt
realtor.com® inquired about – often by a significant
margin. Of those between the ages of 18 and 34 years old, 78
percent have credit card debt, 68 percent have a car loan, 62
percent have a personal loan, 62 percent have mortgage debt, 57
percent have home equity loans, and 61 percent have student
loans.
This is notably higher than 35-54 years old who reported: 72
percent credit card debt, 59 percent car loan, 55 percent have a
personal loan, 60 percent mortgage debt, 49 percent home equity
loan, and 49 percent student loans. Or those 55+ who indicated: 45
percent credit card debt, 30 percent car loan, 12 percent personal
loan, 32 percent mortgage debt, 11 percent home equity loans and 9
percent student loans.
Millennials put the least amount down
When all
respondents were asked how much cash they are planning to put down
on their purchase, 32 percent indicated they are putting down less
than 10 percent of their purchase price. Seventeen percent said 16
to 20 percent of the price and 15 percent indicated 11 to 15
percent of the purchase price.
A down payment of less than 10 percent was most common for the
millennial generation with 37 percent of buyers aged 18-34
reporting this. They were followed by 34 percent of 35-54 year-olds
and 20 percent of those 55 years or older. Millennials were also
the least likely to put more than 20 percent of their purchase
price down with roughly one in four among 18 to 34 year-olds
putting more than 20 percent down, followed by one in three among
35 to 54 year-olds, and one in two among 55+ buyers.
Full results are available here:
https://www.realtor.com/research/millennial-buyers-feel-the-brunt-of-rate-and-price-hikes/
Realtor.com® also recently surveyed house hunters
about what they are looking for in a
home:http://news.move.com/2018-03-30-Rising-Rents-Push-Millennials-to-Become-Homeowners
It also surveyed buyers about the hotly competitive spring
buying season:
http://news.move.com/2018-03-22-Homebuyers-Pull-Out-All-the-Stops-for-Hotly-Competitive-Spring-Market
About realtor.com®
Realtor.com® is the trusted resource for home
buyers, sellers and dreamers, offering the most comprehensive
source of for-sale properties, among competing national sites, and
the information, tools and professional expertise to help people
move confidently through every step of their home journey. It
pioneered the world of digital real estate 20 years ago, and today
helps make all things home simple, efficient and enjoyable.
Realtor.com® is operated by News Corp [NASDAQ:
NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a
perpetual license from the National Association of
REALTORS®. For more information, visit
realtor.com®.
Contact:
Janice McDill:
janice.mcdill@move.com
Lexie Puckett Holbert:
lexie.puckett@move.com
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SOURCE realtor.com