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The generation with the toughest path to homeownership is also the generation that values it the most, according to a new survey.
Even more than their parents generation, millennials are obsessed with homeownership and equate owning a house to truly “making it,” according to new research from Bank of America.
This year’s Bank of America Homebuyer Insights Report shows that “homeownership is more important for millennials than for their parents at the same age.”
That takeaway is either in spite of or because of the fact that millennials have faced a far more difficult path to homeownership than the generations preceding them, with a large chunk of them entering adulthood immediately preceding the 2008 financial crisis and amid the sluggish job market that followed it.
Younger people, especially millennials, are particularly disadvantaged by the current housing market due to 20-year high mortgage rates making already expensive homes further out of reach. Older millennials, those aged 35 to 45, are currently hurting due to carrying an oversized share of outstanding student loans, the report noted.
“Approximately 80 percent of outstanding U.S. mortgages have an interest rate below 5 percent. This gives homeowners an incentive to stay put because the average 30-year fixed mortgage rate hit 8 percent in October of this year,” the report reads. “Younger people, millennials in particular, are being hurt disproportionally by this trend, according to Bank of America Institute’s newly released Housing Morsel. The rate disparity is compressing the already limited supply of houses for sale.”
Despite the challenges, 58 percent of millennials surveyed said they felt homeownership is more important now than it was for their parents. Gen Z holds homeownership in even higher esteem, with 60 percent of Gen Z agreeing with millennials on this score.
Only 26 percent of boomers said they felt homeownership was more important for them than for their parents, suggesting that as real estate becomes more unattainable, it becomes more important to people.
