Down payment disappointment: Most Millennial renters just aren’t saving enough

Insufficient savings

When it comes to saving for a down payment, Millennials are falling behind. In fact, according to a new study, nearly half of Millennial renters have zero down payment savings at all.

The low-down on Millennial down payments

According to the recent 2018 Millennial Homeownership Report from Apartment List, 48 percent of Millennial renters have zero saved for a down payment.

About a third have somewhere between $1 and $4,999 saved up, while 7 percent have $5,000 to $9,999 stowed away. Just over 10 percent have $10,000 or more ready for a down payment.

At the rate most Millennials are saving, the report found it will take two decades or more to save for a down payment.

“Overall, we estimate that just 11 percent of Millennials who plan to purchase homes will be able to save enough for a 20 percent down payment within the next five years,” the report found. “Roughly two-thirds would require more than two decades to save a sufficient amount, effectively putting homeownership out of reach entirely.”

Millennial credit scores aren’t perfect, but they’re still buying homes

Millennial homeownership plans

The report also looked at homebuying timelines for Millennial renters. According to the findings, nine out of 10 Millennials wants to buy a home, but only a mere 4.4 percent plan to in the next year.

A quarter of Millennial renters plan to buy a house in three to five years, while 30 percent say they won’t buy for at least five years or more.

“For many Millennials,” the report found, “homeownership seems to be an aspirational goal rather than an imminent plan.”

For Millennials, homeownership is more important than marriage, kids

The lack of down payment savings is the biggest obstacle, according to the report. Bad credit and student loan debt also pose hurdles for Millennial homebuying.

“The average current down payment savings of debt-free millennial college graduates is nearly three times larger than that of their debt-burdened counterparts,” the report stated. “Similarly, college-educated millennials without debt are putting away more of their monthly paychecks toward saving for a down payment.”

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