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Trulia Survey Finds Millennial Buyers Face Tough Decisions When Entering The Housing Market

Latest findings show 35% of 20-36 year olds who plan to purchase will do so in the next 12 months

SAN FRANCISCO, May 10, 2018 /PRNewswire/ -- Today Trulia®, a home and neighborhood site that helps homebuyers and renters discover a place they'll love to live, released the findings from its Consumer Home Buying Survey which suggests that market conditions and financial obstacles could be forcing millennial homebuyers to consider home and neighborhood trade-offs in order to purchase a home. The survey, conducted online by The Harris Poll of more than 2,000 Americans aged 18 and older, found that 84% of millennials (ages 20-36) say they'd be willing to give up one or more home features to live in their ideal neighborhood, if they were looking for a new home. Meanwhile 89% would be willing to give up one or more neighborhood features to live in their ideal home.

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Millennial Buyers Under Pressure Thanks to Rising Prices and Down Payment Savings
Of the 86% of millennials planning to purchase a home, 35% plan to purchase in the next year. However, rising home prices and shrinking inventory has created an environment where compromises are needed to be made. As the largest prospective home buying generation, almost all (98%) of millennials planning to buy in the next year have encountered obstacles that are keeping them from buying at this time. Unsurprisingly, financial concerns rank at the top of the list, with rising home prices as the most common culprit, affecting 40% of this population and saving enough for a down payment coming in second at 31%.

Which of the following are among the biggest obstacles
that are keeping you from buying a home at this time?

Millennials Planning to Buy in the Next Year

Rising home prices

40%

Saving enough for a down payment

31%

Having a poor credit history

26%

Qualifying for a mortgage

25%

Not having a stable job

22%

Note: Multiple responses possible.

Generational Gap: Money Problems More Likely to Deter Millennial Buyers
Among those who ever planned to buy a home, millennials are the generation most likely to have had to put their home buying plans on hold at 90%, compared to 77% of Gen Xers (ages 37-53) and only 61% of baby boomers (ages 54-73). A look at generational differences in home buying obstacles sheds some light on difficulties that are uniquely skewed toward millennials including job instability (17%) and  inability to pay off student debt (15%). Significantly less baby boomers have struggled with some of the biggest obstacles faced by millennials and Gen Xers – in fact, 39% have never had to put their home buying plans on hold.

Which of the following have ever caused you to put your home buying plans on hold?


Millennials

Gen X

Baby Boomers

Saving enough for a down payment

36%

32%

21%

Rising home prices

27%

26%

17%

Having a poor credit history

25%

21%

9%

Not being able to find a home I like

18%

17%

20%

Rising mortgage rates

17%

12%

11%

Not having a stable job

17%

7%

7%

Unable to pay off student debt

15%

6%

1%

Note: Among Americans that have ever had plans to buy a home. Multiple responses possible.

Home Search Tradeoffs: Garages and Block Parties Top the List of Features to Forgo for Millennials
Perhaps due to tight budgets and fewer inventory, millennials are more willing than any other generation to consider trade-offs in their home and neighborhood. With 84% of millennials willing to give up a home feature to live in their ideal neighborhood and 89% willing to give up a neighborhood feature for their ideal home, older generations are less likely to be willing to compromise. About a third, 35%, of boomers and 22% of Gen Xers say they wouldn't compromise on any home features for their ideal neighborhood while looking for a home, and 19% of boomers wouldn't give up any neighborhood features for their ideal home. Garages are the number one feature to go when it comes to a new home feature for millennials, with 34% willing to give it up – compared to 22% of Gen Xers and 15% of baby boomers.

If you were looking for a new home, which of the following home features
would you be willing to give up if you could live in your ideal neighborhood?


Millennials

Gen X

Baby Boomers

Garage

34%

22%

15%

Recently updated kitchen

32%

29%

22%

Square footage

30%

31%

31%

Storage space

29%

21%

14%

Recently updated bathroom

28%

29%

24%

Yard

26%

25%

21%

A bedroom

26%

15%

11%

A bathroom

20%

13%

7%

Other

5%

6%

3%

None

16%

22%

35%

Note: Multiple responses possible.

Similar to home trade-offs, 89% of millennials are willing to consider neighborhood concessions when searching for their ideal home, with 24% willing to accept higher crime rates, while only 15% of Baby Boomers said the same. However, all three generations agreed that neighborhood activities, such as clubs and block parties, would be the first feature that would get the axe during their home search (35%, 36%, and 42%, respectively).

If you were looking for a new home, which of the following neighborhood features would you
be willing to give up if you could live in your ideal home?


Millennials

Gen X

Baby Boomers

Neighborhood activities (e.g., clubs, groups, block parties, festivals)

35%

36%

42%

Access to parks and/or trails

30%

26%

27%

Neighbors who share the same political and/or social values as myself

30%

25%

29%

Good schools nearby

27%

28%

37%

Short commute to work

27%

30%

29%

Neighbors that you can get along with/socialize with

26%

20%

16%

Low crime rate

24%

21%

15%

Proximity to amenities (e.g., restaurants, shops, grocery stores)

23%

29%

19%

Quiet neighborhood location (i.e., neighborhood not near busy streets/highways)

22%

21%

14%

The aesthetics of the neighborhood (e.g., landscaping, appearance of the houses)

19%

16%

12%

Other

2%

2%

2%

None

11%

13%

19%

Note: Multiple responses possible.

Quotes from Trulia's Senior Economist, Cheryl Young:

  • "For millennials, the dream of homeownership is alive and well, but with prices going up and inventory continuing to shrink, this new generation of buyers are facing more obstacles than any other demographic. With tight budgets and fewer choices on the market, most millennials are forced to make trade-offs and are more willing than other generations to give up home and neighborhood features in order to find their ideal home."
  • "In markets where the economy and job growth are thriving, we may see some of these financial challenges start to dissipate as millennials mature into their careers. If anything, millennials can hold out hope that the encouraging housing starts we saw in 2017 can lead to some relief in the starter home segment."

Methodology
This survey was conducted online within the United States by The Harris Poll on behalf of Trulia from April 10-12, 2018 among 2,026 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact pr@trulia.com.

About Trulia
Trulia's mission is to build a more neighborly world by helping you discover a place you'll love to live. Homebuyers and renters use Trulia's website and suite of mobile apps to get a deeper understanding of homes and neighborhoods across the U.S. through personalized recommendations, insights sourced straight from locals, and 34 different map overlays that offer details on commute, reported crime, schools, nearby businesses, and more. Founded in 2005, Trulia is based in San Francisco, and owned and operated by Zillow Group, Inc. (NASDAQ:Z and ZG). Trulia is a registered trademark of Trulia, LLC.

Media Contact:
Marcelo Vilela
pr@trulia.com 
415-400-7228

 

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