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Takeaways:
- Down payments remain a struggle for millennial real estate clients.
- On average, millennials contributed a down payment of 4.6 percent when purchasing a home during 2014 and early 2015.
- More than 41 percent of respondents used a co-borrower to qualify for home financing.
Rising rents and improving job prospects are driving real estate purchases by millennials, but down payments remain a struggle, according to a survey conducted by Endeavor America Loan Services.
The survey found that on average, millennials contributed a down payment of 4.6 percent when purchasing a home during 2014 and early 2015.
This low percentage means a number of the 5,404 millennials surveyed had to turn to family members for help.
More than 41 percent of respondents used a co-borrower to qualify for home financing. Additionally, 20 percent of millennials surveyed received some form of assistance from a family member for the down payment of their home.
Millennials, on average, took out an $182,879 loan, with an average loan-to-value of 95.4 percent. The average credit source of respondents was 664.
Single-family homes are the primary choice of millennials, as nearly 72 percent purchased this type of residence. More than 18 percent purchased a townhome or condo.
Only 3 percent acquired a two- to four-unit apartment building, with nearly 7 percent buying a manufactured home.
Endeavor predicts an accelerating millennial real estate boom.
“Millennials are maturing, recovering from the recession and forming families,” said Darius Mirshahzadeh, CEO of Endeavor. “They also invested heavily in higher education and are growing in their careers. All of these factors point to what we are now seeing — millennials flooding into the housing market.”
The average age of millennials surveyed was 28.
