We hear a lot about Millennials’ potential to drive the housing market, but are Millennials’ personal finances ready for this generation to become homebuyers? There are 10 things millennials say about personal finance.
In a new study, public relations company Edelman looks at Millennials’ view of money management.
The survey, Millennials & Money, defines Millennials as age 20-35. The survey categorized participants into four ethnic groups: Asian, Black/African-American/Caribbean American, Hispanic/Latino, and White. Survey participants ranged from college students to professionals and heads of households.
The findings may be helpful to anyone working with Millennial homebuyers—mortgage lenders, housing counselors, or real estate agents, for instance.
10 Things Millennials Say About Personal Finance
- Providing for their family is listed as a top indicator for financial success.
- 44 percent belong to a minority race or ethnicity.
- 63 percent aren’t currently saving for the long term.
- 47 percent financially support their families.
- 2 in 5 say debt keeps them from saving money.
- Only 20 percent think they’ll be able to retire at 65.
- 49 percent would trust information from banks when making financial decisions.
- Social responsibility is listed as the top concern when choosing a financial company.
- 67 percent of Asian and White Millennials prefer online access for financial transactions.
- However, just 53 percent of Black Millennials prefer online access for financial transactions.
What Else We Know about Millennials
Adding to the picture of Millennials is Millennial research conducted by Fannie Mae’s Economic & Strategic Research Group. A Fannie Mae National Housing Survey Topic Analysis last year looked at what may spur Millennial renters to become homebuyers.
The survey found that 91 percent of renters age 25-34 plan to buy a home at some point in the future. Forty-four percent say they’re currently renting to financially prepare for homeownership.
So what could prod Millennial renters to become homebuyers?
The top motivator according to 40 percent of Fannie Mae survey participants would be an increase in their income. And 52 percent cite personal financial reasons, such as income or debt, as the most important barrier to buying a home.
Employment among 25 to 34 year-olds has increased at a healthy pace, and their employment as a share of the total labor force has risen to the highest reading since 2002.
Snowballing prosperity may already be affecting home sales. For the third straight year, the largest group of recent buyers were Millennials, who composed 35 percent of all buyers (32 percent in 2014), more than the combined amount of younger and older boomers (31 percent), says the National Association of Realtors®.