“Millennials,” or people aged 18-34, plan to make more of a move in the housing market, particularly within the next five years. Thirty-two percent of 18-34 year olds say they plan to buy a home in the next 12 months. What’s more, three quarters of Millennials plan to buy a home in the next five years, according to a survey of 2,500 adults released by BMO Harris Bank that compared the timelines for likely home purchases among age groups.
For comparison, 62 percent of the 35 to 44 age group says they plan to move within the next five years; 35 percent of 45 to 54 age group; 31 percent of ages 55 to 64; and 19 percent of those older than 65.
“We’re seeing a fair amount of confidence in the housing market, which is encouraging news,” says Kevin Christopher, head of mortgage sales at BMO Harris Bank. “For many in the under 35 age range, this may be their first home.”
But home ownership is still out of reach for some. About one-third of renters surveyed say they would like to buy a home but they’re unable to afford it. High student loan debt continues to be a big obstacle for Millennials in qualifying for a mortgage to purchase a home.
“While the housing market is on the upswing, the record level of student debt carried by young Americans does pose a challenge to many in their 20s and 30s hoping to purchase their first home,” says Michael Gregory, head of U.S. Economics at BMO Capital Markets. “Student debt levels have more than doubled in the last seven years to $1.1 trillion. The financial burden means renters are delaying entering the purchasing market, which has a trickle-down effect on the overall housing recovery.”
Source: BMO Harris Bank