45% of millennials hope to skip over a ‘starter home’

Young adults have waited longer than past generations to jump into homeownership. And, as they wait, that have apparently ratcheted up their expectations over what that first home will look like for when they finally take the plunge.

Almost half the millennials surveyed (45 percent) say they expect their first home to be their "dream home," according to a new survey of 2,000 millennials between the ages of 22 and 37, released by Northshore Fireplace.

Millennials are willing to move to a different area to get this piece of their American dream, too: 65 percent say they're willing to relocate to find a home they can afford, and 41 percent say they're willing to move to a different state.

But can millennials actually afford their dream home first time out? Half of millennials surveyed say they have only $2,000 or less saved for a downpayment. And they believe their first home will cost $218,152 (average), even though the median cost of an existing home in the U.S. is $249,500, according to the National Association of Realtors' (NAR) housing report for February.

In a separate study by Porch.com, a home improvement website, millennial buyers were the most likely compared to other generations to pay more for must-have amenities. Many of the amenities they most sought out related to convenience or comfort, such as a private backyard or patio (they're willing to pay $7,009 more for a home with one); a swimming pool (they'd pay $6,346 more for one); central air conditioning and heating ($6,194); and solar panels ($5,469), according to the survey.

Some millennials may be willing to wait until they can afford their dream home. Their top fears delaying a home purchase are:

  • Burden of paying a mortgage (41 percent)
  • Unforeseen maintenance issues with the home (35 percent)
  • Being locked into one location by buying (17 percent)
  • Upkeep of the home (7 percent).

Source: "First-Time Millennial Home Buyers," Northshore Fireplace (2019)

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