The Sanderson Sisters certainly didn’t have to worry about down payments – but a new study shows that aspiring homeowners undeniably have to.
In the past 30 years plenty has changed in terms of housing prices.
Zillow released research that reveals prospective homeowners trying to reach a 20% down payment will need to save on average for about 7.2 years – an extra year and a half than it was back in 1988. Even if a buyer’s saving rate matched that of a buyer decades ago, they still wouldn’t be in the ball park of placing that high of a down payment.
Looking specifically at millennials, one can begin to understand why they’ve had a harder time entering the housing market. Zillow’s report shows that 46% of first-time homebuyers use their savings to put down on a home – compared to 35% of repeat buyers. Millennials are spending more on student loans and rent prices than past generations, and their opportunities to save for a home consequently dwindle.
While it is taking longer for millennials to reach their down payment goal, millennials in their thirties with a college degree and student debt account for 33% of homeowners – so, there is still potential – just slower potential.
Maybe we can blame the Sanderson Sisters for putting a spell on the housing market?