SAN FRANCISCO, June 4, 2014 – Trulia (NYSE: TRLA), a leading online marketplace for home buyers, sellers, renters, and real estate professionals, today issued the findings from its latest consumer survey with millennial home buyers. For sixty percent of young adults, aged 18-34, their finances are the single biggest obstacle standing between them and homeownership. As a result, 50 percent have to go to family members for help in achieving their dream.
Lack of savings, debt and poor credit are all reasons why millennials are unable to pull together the necessary down payment for a house themselves. In response, half of the millennials surveyed said they would ask their parents or even their grandparents for help. For those unable to head to the bank of mom and dad, 37 percent plan to work a second job in order to save up, and 22 percent of millennial home buyers said they will use a state or federal government program to help achieve the American dream of homeownership.
“Saving up for a down payment is a big obstacle and it can make the home buying process even more intimidating,” said Michael Corbett, Trulia’s real estate expert. “Millennial home buyers need to know that if they are going to turn to bank of mom and dad for a down payment they should treat it like a loan. Write up a contract and determine what is best for monthly payments. This will and can avoid money woes among family members.”
Even though their finances are the biggest barrier to home ownership, they aren’t prepared to give up life’s little luxuries to help save for their down payment. 65 percent reported that they wouldn’t give up their car to help save for a down payment, but other modern day luxuries are “have to haves” for this generation – including their smartphone, cable, and even their Netflix subscription.
Here are the Top 10 items that millennials would NEVER give up:
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Top 10 items millennials would NEVER give up to save for a down payment
|
|
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1. Car |
65% |
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2. Smartphone |
45% |
|
3. Cable |
20% |
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4. Netflix Subscription |
15% |
|
5. Vacations |
14% |
|
6. Eating out/take out |
13% |
|
7. Clothes shopping |
10% |
|
8. Organic Shopping |
10% |
|
9. Gym membership |
7% |
|
10. A morning latte/cappuccino |
5% |
Where Putting 20 Percent Down is Not the Norm
While home prices continue to rise, millennials are focused on buying a home that’s affordable. Among the millennials surveyed, 68 percent are looking to buy a home priced under $200,000. However, nearly half don’t know how much money they need for a down payment. Among the majority of those that do know, nearly two in five would put less than 10 percent down toward a home.
“When buying a home today, it’s critical to be conservative and to safeguard your purchase. Forget the ‘no money down,’ or the 5 and 10 percent down payment purchases. Many banks will be hesitant to give you a mortgage otherwise. The goal should be a 20 percent down payment. It gives you some equity right from the start, gets you a lower interest rate, reduces your monthly mortgage payment and lets you avoid PMI monthly fees. All of which really adds up to significant savings. Best rule of thumb: If you are close, but can’t quite hit the 20 percent benchmark, you may want to look at a slightly lower price tag rather than over overextend into something you might not really be able to afford just yet.” added Corbett.
If money is tight and a down payment seems out of reach, enter Trulia’s $50K Giveaway for a chance to win $50,000 to use toward a down payment or any other home expense.
For more information, visit www.trulia.com
ABOUT TRULIA, INC.
Trulia (NYSE: TRLA) gives homebuyers, sellers and real estate agents all the tools and valuable information they need to be successful in the home search process. Through its innovative mobile and web products, Trulia provides engaged home buyers and sellers essential information about the house, the neighborhood, and the process while connecting them with the right agents. For agents, Trulia, together with its Market Leader subsidiary, provides an end-to-end system that enables them to find and serve clients, create lasting relationships, and build their business. Founded in 2005, Trulia is headquartered in San Francisco with offices in New York, Denver, and Seattle. Trulia and the Trulia marker logo are registered trademarks of Trulia, Inc.
Survey Methodology
This survey was conducted online within the United States by Ask Your Target Market on behalf of Trulia among 500 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact pr@trulia.com.
