Millennials and Homeownership

More and more millennials are looking to transition from renters to homeowners, nearly eighty percent of them have said they’d like to purchase a home.  Research has shown that as rents continue to rise, homeownership is a more cost-effective solution than renting, where monthly payments are not going towards building equity.  The problem is many of these millennials are significantly underestimating how much money is needed to make the crucial down payment.

Millennials are currently at the ages where they’re getting married and building families, but South Florida’s increasing lack of affordability may be holding them back. Surveyed millennials in South Florida reported an average of about $3,400 in savings towards a down payment, estimating that they’re saving about $250 a month while also getting about $2,350 in help from outside sources.  At this pace, it would take the average millennial over six years to have enough money saved to make a down payment even though most of them are planning on purchasing a home within the next five years.

The problem here is millennials are lowballing the estimates, believing they would need $20,180 for a twenty percent down payment when it’s more along the lines of $26,000, or 29 percent.  What happens when it comes time to buy a home and a buyer realizes he or she cannot afford the home they want in their preferred neighborhood of choice?

This update is brought to you by the Kawas Team, specializing in South Beach luxury homes.  The Kawas Team can help you find the right property.  If you would like additional information on pre-construction sales, call 305.608.6681 to speak with an expert.  Visit our website for information on the many new projects throughout the many Miami luxury neighborhoods and beyond.