DEBUNKING THE MYTH OF MILLENNIAL HOMEBUYER PESSIMISM
Content originally posted and shared with permission by ValueInsured.
We have all read the headlines: Millennials feel pessimistic about their future; Millennials are the gloomy generation. But according to the latest quarterly Modern Homebuyer Survey by ValueInsured, Millennials reported to be rather upbeat, at least when it comes to their outlook on the American housing market and their prospects of achieving the American Dream.
The survey results are rather jarring. In all measures, except one – more on that later – Millennials surveyed in the research appear more optimistic than their Gen-X and Baby Boomer counterparts.
In the survey conducted in January 2017, Millennials were more likely to think the current American housing market is healthy. They are also more likely to believe buying a home today is a good investment - even when they are less likely to currently own a home, compared to the Gen-Xers and Baby Boomers surveyed. Despite being more likely to be renters and to prefer a more nomadic lifestyle, Millennials in the survey are more likely to believe buying a home is more financially beneficial than renting.
Here are samples of Millennials’ relative optimism regarding our current housing market:
- 64% of all Millennials surveyed think the American housing market is healthy, versus 60% Gen-Xers surveyed (-4 percent points) and 51% Baby Boomers (-13 percent points) who think the same
- 76% of Millennials – more than 3 in 4 surveyed – think buying a home today is a good investment, versus 71% Gen-Xers (-5 percent points) and 69% Baby Boomers (-7 percent points)
- 83% of Millennials think buying a home is more financially beneficial than renting, versus 78% Gen-Xers surveyed (-5 percent points) and 78% Baby Boomers (-5 percent points)
- 63% of Millennials think the housing market is headed in a good direction “for people like me”, versus 60% Gen-Xers surveyed (-3 percent points) and 46% Baby Boomers (-17 percent points)
- 62% of Millennials think the housing market will be “more favorable for me” in 2017, versus 61% Gen-Xers surveyed (-1 percent point) and 51% Baby Boomers (-11 percent points)
While some of these levels of optimism among Millennials may come as a surprise, they are consistent with a commonly reported Millennial trait, that they are a very confident generation. As hinted above, there is one exception, perhaps more in line with most Millennials’ present fiscal realities. Only 44% of Millennials surveyed believe they could afford a down payment to buy a first home, compared to 45% Gen-Xers and 52% Baby Boomers who reported the same.
Another interesting measure to note is Millennials’ – in fact, all three generations’ – pessimism about the possibility of another housing crisis. Fewer than half Millennials surveyed, or 48%, are confident another housing crisis similar to 2008 will not happen again in their lifetime. This is noteworthy as most Millennials did not directly experience the 2008 housing crisis, at least not as homeowners. 48% Gen-Xers say they are confident the crisis will not happen again in their lifetime, and only 32% Baby Boomers – the generation most affected by the 2008 crisis – are confident something similar will not happen again.
To end on a more upbeat note, Millennials do appear very optimistic about the future of the American Dream, and their own prospects of achieving it:
- 64% Millennials believe the American Dream is alive and well, compared to 58% Gen-Xers (-6 percent points) and 52% Baby Boomers (-12 percent points)
- 78% Millennials believe they can achieve the American Dream, compared to 69% Gen-Xers (-9 percent points) and 57% Baby Boomers (-21 percent points)
One last surprise that defies the Millennial myth? 83% of all Millennials surveyed say owning a home is an important part of their personal American Dream. With such a positive outlook on the housing market, it does appear most Millennials believe their American Dream will be a rosy one.