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RE/MAX: Costs Hold Back Eager Millennial, Gen Z Buyers
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RE/MAX, Denver, released a new survey finding that 63% of Millennial and Gen Z respondents are ready to become homeowners, but are discouraged by the current environment.
Broken down by generation, 65% of Gen Z respondents are eager or interested in homeownership, and 61% of Millennials feel the same.
When asked about current obstacles they expect to face when purchasing a home, 40% pointed to the affordability of upfront costs, such as down payments and closing costs, 39% cited saving for down payments specifically and 39% listed qualifying for a mortgage. High interest rates, difficulty finding properties and the general competitiveness of the housing market were also highlighted.
Respondents also listed concerns about costs that are accrued after a home is purchased, including maintenance and upkeep costs (50%), property taxes (49%), monthly mortgage payments (46%), homeowners insurance (30%) and housing market fluctuations (24%).
The most important factors the respondents would consider when buying a home are price (59%), location (54%), size (34%), neighborhood safety (33%) and mortgage rates (24%).
In terms of their preparedness for home ownership, 65% of respondents reported they are fairly or very knowledgeable about the residential real estate market.
And, 56% said they are confident in their understanding of key financial terms related to homeownership; 52% say they are confident in their financial readiness to buy a home.
Thirty-eight percent said they are planning to finance their future home purchase with savings, and 35% report planning to use a mortgage.
Also, 38% say they are working on saving for a down payment, 17% say they already have one saved and 26% say the plan to start saving soon. Just over two-thirds (67%) believe it’s essential to have a 20% down payment saved when buying a home.